Seagate Technology Holdings plc (NASDAQ:STX)’s shares have caught a lot of quarters, including Cramer, by surprise in today’s AI-driven era of investing. They are up by 447% over the past year and by 181% year-to-date. The CNBC TV host has discussed Seagate Technology Holdings plc (NASDAQ:STX) several times over the past couple of months. For instance, in May, he commented on the firm’s earnings multiple and remarked that it was “too pricey, [at] nearly 50 times next year’s earnings estimates.” After Seagate Technology Holdings plc (NASDAQ:STX) reported its fiscal fourth quarter earnings in late July, Cramer praised the results and was exasperated by management’s comments during the earnings call:
“SK Hynix “miss” may not be that bad. Seagate is good. But have to deal with Iran….
“How many times can Seagate say that there has been no diminution of demand in one conference call?”
Cramer’s remarks about slowing demand are also at the center of the debate raging around Seagate Technology Holdings plc (NASDAQ:STX). The bulls and the bears are torn about whether the booming demand that the firm is experiencing is part of a new trend where it’s sustainable or whether it will follow the historically cyclical patterns of the storage industry. The booming demand led Seagate Technology Holdings plc (NASDAQ:STX) to grow its fiscal fourth quarter revenue to $3.6 billion to mark a 48.5% annual growth. Additionally, higher demand also enabled the firm’s margins to expand to 52.7%, which was a significant jump over Q4 2025’s 37.9%. The strong set of results led the bulls to argue that Seagate Technology Holdings plc (NASDAQ:STX) was experiencing sustainable demand driven by the ongoing AI infrastructure buildout.
Yet, the strong share price performance makes the bears anxious. They point out that as Seagate Technology Holdings plc (NASDAQ:STX)’s shares have jumped by triple-digit percentages, the firm’s future growth might already be priced into the stock. Additionally, they add that the firm might also have to depend to a large extent on its future Heat-Assisted Magnetic Recording (HAMR) products and the Mozain platform to maintain its market share. While the bulls believe that the high-density drives have enabled margin expansion, the bears caution that should the industry shift towards solid-state drives (SSDs), Seagate Technology Holdings plc (NASDAQ:STX) might experience headwinds.
In Q4 2025, 74 out of the 1,041 hedge funds part of Insider Monkey’s database had held a stake in Seagate Technology Holdings plc (NASDAQ:STX). In Q1 2026, this figure jumped to 93 out of 1,022 hedge funds. Arrowstreet Capital remained the biggest stakeholder even though its $561 million stake marked a 56% drop. A notable jump came from D E Shaw, which bumped its stake by 62% to $505 million. As for the short sellers, 3.7% of the float was short as of mid-July.
While Insider Monkey acknowledges the risk and potential of STX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than STX that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
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