Seagate Technology Holdings PLC STX

Rerating Seagate Shares Higher as Pricing Environment Is Strong With High Multiyear Visibility

Seagate Technology is a leader in hard disk drives. The HDD market has become concentrated, with only three players remaining: Western Digital, Seagate, and Toshiba. Seagate and Western Digital have jostled back and forth for top share over the last decade, while Toshiba remains a distant third. HDDs are being phased out in key end markets in favor of solid-state drives, but we still see a future for HDDs in data centers. The economics (total cost of ownership) still favor HDDs over SSDs for workloads where controlling costs is important while immediate read access is not. This is commonly referred to as nearline storage, which we expect will make up almost all of Seagate’s business over time.