Seagate Technology (STX) Bank of America 2026 Global Technology Conference summary

Market cycle and demand trends

• Achieved 13 consecutive quarters of revenue and profitability growth, with expectations for this trend to continue for at least the next four to five quarters based on current orders.

• Demand is exceeding previous expectations, driven by digital applications and data-centric growth, with no signs of a macroeconomic downturn impacting orders.

• Orders for the next four to five quarters are precise in mix, volume, price, and delivery, providing high confidence in near-term outlook.

• Longer-term customer commitments focus on exabyte allocation, with detailed orders solidifying as delivery nears.

Pricing, profitability, and industry discipline

• Pricing improvements are measured and sustainable, with the industry showing discipline in capacity additions and pricing strategies.

• Revenue and profitability have increased every quarter for over three years, with expectations for this to persist.

• Factory utilization is at or near maximum, and product roadmap focuses on increasing capacity per unit, generating 25% more exabytes annually.

• Cost per terabyte is improving with the transition from PMR to HAMR technology, with 50TB drives expected before the end of 2027.

• Incremental gross margins remain strong, supported by higher demand and disciplined pricing.

Technology and product strategy

• Focus on technology advancements, particularly HAMR, enables higher capacity drives and faster customer qualification cycles.

• Industry avoids oversupply by increasing exabyte output without adding new factories or units, reducing risk of market imbalance.

• Customers are incentivized to adopt higher capacity drives to maximize slot revenue and reduce total cost of ownership.

• Majority of current demand is for new data centers, with refresh cycles offering significant financial returns for customers.