Seagate Expects Strong Q2 Results Driven by AI Growth

Basio badr

ago 3 hours

Seagate Expects Strong Q2 Results Driven by AI Growth

Seagate Technology has announced an optimistic forecast for its second-quarter performance, anticipating revenue and profit will exceed analysts’ predictions. This anticipation is fueled by the growing demand for storage devices as cloud providers invest heavily in hardware to support the development of generative AI.

Strong Q2 Revenue Projections

The company is expecting to generate approximately $2.70 billion in revenue, with a margin of error of $100 million. This projection surpasses the average estimate of $2.66 billion made by analysts, as reported by LSEG data.

Adjusted Profit Estimates

Seagate also forecasts an adjusted profit of about $2.75 per share for the current quarter. This figure exceeds expectations of $2.62 per share set by financial analysts.

Driving Factors Behind Growth

The company attributes its robust forecast to increased product shipments. This surge is driven by:

Rising demand for established use cases, such as social media video platforms.
New growth opportunities spurred by AI applications.

CEO Dave Mosley emphasized that these trends reflect a normalization of memory device inventory levels following a period of overproduction that led cloud providers to reduce orders.

Impact of AI on Storage Demand

The integration of AI features in personal electronics has significantly increased the memory requirements for these devices. This trend presents a beneficial scenario for Seagate, whose hard disk drives and storage products are widely utilized in various electronic devices.

Review of Recent Financial Performance

For the first quarter ending October 3, Seagate reported revenues of $2.63 billion, exceeding analyst expectations, which were set at $2.55 billion. The company’s adjusted earnings were recorded at $2.61 per share, again surpassing estimates of $2.37 per share.

In summary, Seagate is poised for a strong second quarter, backed by the increasing demand for storage solutions in the rapidly evolving landscape of artificial intelligence and personal electronics.