Seagate Technology (STX) First Take Strong quarter with significant upside to guidance relative to elevated expectations

Equity Research 28 July 2026 | 4:15PM EDT

Seagate Technology (STX): First Take: Strong quarter with significant upside to guidance relative to elevated expectations

Key stock takeaways: We expect the stock to trade higher on significant upside to James Schneider, Ph.D. | both the quarter and guidance despite elevated expectations heading into the print. Goldman Sachs & Co. LLC Our investor conversations highlight bullish positioning heading into the quarter, Khalil Fenina based on strong CapEx and storage demand trends from hyperscalers as well as tight | supply dynamics in HDDs. We expect the following topics to be in focus on the Goldman Sachs & Co. LLC

earnings call: (1) hyperscaler demand trends; (2) the outlook for HDD pricing on Anmol Makkar | CY27 orders; (3) the shape of Seagate’s HAMR technology ramp in 2H26. Goldman Sachs & Co. LLC Quarterly results were above the Street: Seagate reported revenue of $3.63 bn, Luya You | above GS at $3.58 bn and the Street at $3.50 bn, while gross margin of 52.7% was Goldman Sachs & Co. LLC well above GS at 50.7% and the Street at 50.6%. Operating EPS of $5.71 was well above GS at $5.26 and the Street at $5.12.

1Q EPS guidance is well above the Street. Seagate guided 1Q well above the Street. Revenue was guided to $4.1 bn at the midpoint, which is well above GS at $3.87 bn and the Street at $3.77 bn. Operating EPS guidance of $7.30 is far above GS at $6.11 and the Street at $5.89.

Price target and risks: Our 12-month price target of $960 is based on a 24 P/E multiple applied to our normalized EPS estimate of $40.00. Key downside risks: (1) difficulties qualifying HAMR at hyperscaler customers; (2) lack of supply-side prudence from Seagate or the broader industry.

Exhibit 1: Seagate - Variance summary 2Q26 Financials ($ mn, except EPS) Actual GS Street Actual/GS Actual/Street Total Revenue 3,629 3,579 3,502 1.4% 3.6% QoQ 28.5% 15.0% 12.5% YoY 68.0% 46.5% 43.3% Gross Margin 52.7% 50.7% 50.6% +203 bps +214 bps Operating Margin 44.6% 42.0% 42.1% +259 bps +251 bps Non-GAAP Diluted EPS $5.71 $5.26 $5.12 8.5% 11.5%

Source: Company data, Visible Alpha Consensus Data, Goldman Sachs Global Investment Research

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Seagate Technology (STX)

Exhibit 2: Seagate - Guidance 3Q26E Financials ($ mn, except EPS) High Low Guidance (midpoint) GS Street Guidance/GS Guidance/Street Total Revenue 4,200 4,000 4,100 3,874 3,773 5.8% 8.7% QoQ 13.0% 6.8% 4.0% YoY 67.8% 47.4% 43.5% Non-GAAP Diluted EPS $7.50 $7.10 $7.30 $6.11 $5.89 19.5% 24.0%

Source: Company data, Visible Alpha Consensus Data, Goldman Sachs Global Investment Research

STX 12m Price Target: $960.00 Price: $816.99 Upside: 17.5%

Buy GS Forecast 6/25 6/26E 6/27E 6/28E Market cap: $187.1bn Revenue ($ mn) 9,097.0 12,145.3 16,978.4 20,878.2 Enterprise value: $189.1bn EBITDA ($ mn) 2,153.0 4,383.1 8,088.0 10,904.3 3m ADTV: $4.0bn EBIT ($ mn) 1,927.0 4,121.1 7,824.0 10,640.3 United States EPS ($) Americas Semiconductors & IT P/E (X) Services EV/EBITDA (X) M&A Rank: 3 FCF yield (%) 3.9 1.6 3.4 4.5 Dividend yield (%) 2.9 0.4 0.4 0.4 Net debt/EBITDA (X) 1.9 0.5 (0.3) (0.8)

3/26 6/26E 9/26E 12/26E EPS ($)

Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 27 Jul 2026 close.