Seagate’s most recent quarter delivered growth above Wall Street’s expectations, but the market responded negatively, reflecting some caution. Management attributed the strong performance to ongoing demand from cloud providers and a successful ramp of its advanced nearline and HAMR-based hard drives. CEO Dave Mosley highlighted that 'record gross margins' and robust exabyte shipments were underpinned by product transitions and discipline in aligning supply with demand. The company also emphasized operational improvements and increased adoption of high-capacity drives by major cloud customers as key contributors to the quarter’s results.\n\nIs now the time to buy STX? Find out in our full research report (it’s free).\n\nSeagate Technology (STX) Q2 CY2025 Highlights:\nRevenue: $2.44 billion vs analyst estimates of $2.43 billion (29.5% year-on-year growth, 0.6% beat)\nAdjusted EPS: $2.59 vs analyst estimates of $2.44 (6% beat)\nAdjusted EBITDA: $701 million vs analyst estimates of $699 million (28.7% margin, in line)\nRevenue Guidance for Q3 CY2025 is $2.5 billion at the midpoint, below analyst estimates of $2.56 billion\nAdjusted EPS guidance for Q3 CY2025 is $2.30 at the midpoint, below analyst estimates of $2.32\nOperating Margin: 23.2%, up from 16.6% in the same quarter last year\nInventory Days Outstanding: 86, down from 96 in the previous quarter\nMarket Capitalization: $32.26 billion\n\nWhile we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.\n\nOur Top 5 Analyst Questions From Seagate Technology’s Q2 Earnings Call\nErik Woodring (Morgan Stanley) asked about the implied gross margin guidance for the next quarter. CFO Gianluca Romano replied that the guidance suggests a more significant margin expansion than analysts were modeling, emphasizing continued progress toward longer-term margin targets. Asiya Merchant (Citigroup) inquired about the impact of AI inference and edge demand on storage needs. CEO Dave Mosley described video and unstructured data applications as major growth drivers in both cloud and edge environments, supporting their exabyte growth assumptions. Jim Schneider (Goldman Sachs) questioned the revenue contribution and margin impact of HAMR drives. Management confirmed HAMR shipments are growing and expected to be increasingly accretive to gross margin as capacity ramps up. Wamsi Mohan (Bank of America) sought clarification on the alignment between HAMR capacity ramp and customer qualifications. Management explained that some production is reserved for qualification, which limits short-term revenue growth but supports long-term adoption. Thomas O'Malley (Barclays) asked about the breadth of HAMR adoption beyond the initial customer. Mosley confirmed that multiple customers are now ramping, with strong demand for higher-capacity drives driving further transitions.\n\nCatalysts in Upcoming Quarters\nIn the coming quarters, the StockStory team will monitor (1) the pace and breadth of HAMR drive adoption and customer qualifications, (2) Seagate’s ability to expand production while maintaining gross margin improvements, and (3) the impact of new global tax rules and share buybacks on earnings per share. The migration of enterprise and edge workloads to higher-capacity platforms and progress in product transitions will also be important indicators of sustained growth.\n\nSeagate Technology currently trades at $151.02, down from $152.90 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).\n\nOur Favorite Stocks Right Now\nDonald Trump’s April 2025 'Liberation Day' tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities. The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

The 5 Most Interesting Analyst Questions From Seagate Technology’s Q2 Earnings Call

Seagate Technology reported strong Q2 2025 financial results, exceeding revenue and earnings expectations, driven by increased demand from cloud providers and the ramp-up of advanced nearline and HAMR-based hard drives. Despite strong performance, the market reacted negatively, possibly due to caution around future growth. Management highlighted record gross margins, robust exabyte shipments, and improved operational efficiency. Key analyst questions focused on HAMR drive adoption, AI and edge storage demand, margin guidance, and customer qualification timelines. The company provided guidance for Q3 with slightly lower revenue and EPS expectations than analyst forecasts. Future catalysts include HAMR adoption pace, production scalability, and the impact of new global tax rules and share buybacks. Seagate currently trades at $151.02, down from $152.90 pre-earnings.