Seagate Technology Holdings plc (NASDAQ:STX) closed at $690.81 on October 15. The stock returned 29.90% over the last 6 months, compared with a 15.4% return for the Insider Monkey Billionaire Index and 11.4% for the State Street SPDR S&P 500 ETF Trust.
Hard disk drives store data on spinning magnetic platters. They have been declared obsolete for most of two decades, steadily replaced in laptops and phones by flash memory with no moving parts. Seagate is one of only three companies that still makes them at scale. Its shares are up 206.48% over the past year, which is not how the story of a dying technology usually goes.
READ ALSO: 10 Most Undervalued Quality Stocks to Invest In
The Part Nobody Priced In:
Flash replaced hard drives where speed matters and size does not. It never replaced them where the opposite is true, which is storing enormous quantities of data that is rarely read.
Artificial intelligence produced exactly that kind of data, in volumes nobody had planned storage for. Hard drives remain considerably cheaper per unit of capacity, and at the scale data centres now operate, that difference decides the purchase.
The financial effect has been dramatic. Revenue rose 48.5% in the most recent quarter, and earnings grew 165.2%. Seagate holds one of the widest analyst gaps in our 10 Most Promising Technology Stocks to Buy Right Now. To see the rest, click HERE.
Three Companies and a Long Memory:
The pricing power comes from scarcity of supply rather than from anything special about the product. Three firms make these drives, and Seagate has told investors that the capacity it sells to data centres is fully allocated through this year. Demand arrived faster than the industry could serve it.
That is a condition rather than an advantage. Any competitor adding output changes it, and the industry has a long history of prices falling once supply catches up with demand. The balance sheet carries its own tension. Debt runs at 179.88% of equity, which is manageable while cash is flooding in and considerably less so if the pricing that produced it goes away.
DON’T MISS: 10 Best Stocks to Buy for High Returns in 2026
A Cyclical Business at a Cyclical Price:
The shares change hands at 25.71 times what analysts expect next year, against 66.17 times the past year. The forward figure is the one the market is actually using, and it still assumes earnings stay far above where this business used to operate.
Everything rests on the shortage lasting. Judge that wrong and 25.71 times peak earnings turns into a far larger number on normal ones, which is the arithmetic that has caught buyers of this industry before.
Conclusion:
The technology was never finished, only pushed into the corner of the market where cost per unit of capacity beats speed. That corner then became the fastest-growing part of storage, which nobody forecast. The rise is real, and the reason for it is sound, but it rests on three companies having too little capacity rather than on anything a competitor cannot copy. Watch what any of them announces about building more, because that is the thing that ends this.
Check out: 10 Best Mortgage Finance Stocks To Buy According to Billionaires
Market Sentiment:
Seagate Technology Holdings plc (NASDAQ:STX) was held by 131 hedge funds with a combined stake value of about $17.60 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 93 hedge fund holders with a cumulative investment value of around $6.08 billion in the previous quarter.
READ NEXT: 10 Most Promising Technology Stocks to Buy Right Now and 10 Most Undervalued Quality Stocks to Invest In
This article is originally published at Insider Monkey.
