Seagate Stock Skyrockets 80% in 2025. Here’s Why STX Might Still Be a Steal

Seagate Technology (STX) has been one of the top-performing S&P 500 Index ($SPX) stocks of 2025. It has soared over 80% year-to-date. This significant rally is supported by the solid demand for the company’s products, increased investments in artificial intelligence (AI) infrastructure, its improving leverage profile, and improved profitability.

Seagate is seeing surging demand for its mass-capacity storage products. As cloud computing expands and data centers scale up to support AI applications, the demand for high-capacity hard drives continues to soar. Seagate is well-positioned to capitalize on this opportunity. Its products have become essential for hyperscale cloud providers and enterprises alike, making it a natural beneficiary of the AI-driven data explosion.

The company’s financials reflect the solid demand trends. Seagate recently closed fiscal 2025 on a solid note. Revenue surged 39% in fiscal 2025, adjusted gross profit nearly doubled, and operating profit more than tripled. This solid performance is driven by its supply-demand alignment, tight cost controls, and a focus on high-value products.

Quarterly performance has been just as impressive. In the most recent fiscal fourth quarter, revenue jumped 30% year-over-year, while adjusted gross margin expanded 170 basis points sequentially. This sustained improvement reflects the company’s shift toward a build-to-order (BTO) manufacturing model, supply discipline, and dynamic pricing strategies, all of which have helped the company maintain profitability even in competitive markets.

Seagate is in a solid growth phase, with no signs of losing momentum. It continues to see strong demand for its products, a trend that is expected to drive both its financials and share price higher. Management is optimistic about margin expansion, thanks to the accelerating adoption of its next-generation Heat-Assisted Magnetic Recording (HAMR)–based Mozaic drives.

Looking ahead, mass capacity storage remains a key growth driver. Seagate is ramping production of its HAMR-based Mozaic products and gaining traction with customers at an impressive pace. Three major cloud service providers have already qualified these drives, with more customers moving through the qualification process smoothly. Demand from cloud providers is surging, and even the enterprise OEM market is showing signs of life, with nearline sales posting modest sequential gains. Management expects this demand to hold steady in the months ahead.