Goldman Sachs sees Seagate’s demand, HAMR ramp and capital-return plans supporting its Buy case through FY27.

Overview

This conference takeaway summarizes Seagate management’s outlook for storage demand, pricing, HAMR adoption, supply discipline, financial progression and capital returns. Goldman Sachs retains its Buy rating and $960 price target.

Core views

Goldman Sachs identifies continued storage-demand strength and higher storage value as the basis for further pricing uplift and margin support through FY27. Management cited an approximately 11% year-on-year increase in price per exabyte in the prior quarter and expects the momentum to persist. It pointed to autonomous-vehicle applications and storage’s attractive total cost of ownership as supports for continued exabyte-demand growth. The report highlights the transition to heat-assisted magnetic recording (HAMR) as a central operating catalyst. HAMR volumes ramped during the quarter and are expected to exceed perpendicular magnetic recording (PMR) volumes on an exabyte basis by the end of calendar 2026. Mozaic 4 has been qualified with customers in the United States and Asia and has received positive feedback. Seagate expects HAMR to account for 80%-90% of volume within a few years, while retaining PMR for lower-capacity drives. Management also emphasized industry supply discipline. It views node transitions, rather than greater unit shipments, as sufficient to generate appropriate near-term exabyte growth. Seagate remains disciplined on capital expenditure because data-center customers could eventually encounter other bottlenecks that may affect demand. For financial performance, management continues to expect sequential revenue and EPS increases throughout FY27. Goldman Sachs expects at least 70% incremental gross margins over that period, supported by the HAMR transition, internal-laser cost benefits and pricing tailwinds. Its forecast table shows revenue rising from $12,195.0 million in FY26 to $18,864.5 million in FY27E and $24,532.7 million in FY28E, while EPS rises from $14.83 to $35.09 and $51.00, respectively. On capital allocation, management remains focused on retiring high-yield debt and intends to repurchase another high-yield note next quarter. It may consider a near-term dividend increase, but described accelerated share repurchases as the primary means of returning excess capital to shareholders. Goldman Sachs maintains Buy and values STX at a $960 12-month target using a 24x P/E multiple on normalized EPS of $40.00.

Analysis framework

The report uses management commentary from the Communacopia + Technology conference to assess demand, pricing, technology adoption, supply behavior, margins and capital allocation. Goldman Sachs then links these drivers to its FY27 earnings outlook and applies a P/E multiple to normalized EPS for its target price.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  P/E valuation

  Goldman Sachs derives its $960 12-month target by applying a 24x P/E multiple to normalized EPS of $40.00.

• Industry AnalysisSupply-demand framework

  Storage supply-demand and pricing analysis

  The report connects exabyte demand, industry supply discipline and node transitions to pricing uplift and margin support.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Seagate Technology (STX.US)

  Primary covered company; Goldman Sachs retains Buy based on pricing, HAMR adoption, margin expansion and capital returns.

  Strengths

  Strong storage-demand trends, pricing uplift, HAMR qualification progress, internal-laser cost benefits and planned debt reduction.

  Comparison

  HAMR is expected to exceed PMR on an exabyte basis by the end of calendar 2026, although PMR is expected to remain relevant for lower-capacity drives.

  Risks

  Difficulty qualifying HAMR at major hyperscalers and insufficient supply-side prudence by Seagate or the broader industry.

Key data

• 12-month price target$960.00Based on 24x normalized EPS of $40.00.
• Current price$885.92Price as of the 9 September 2026 close.
• Implied upside8.4%Target-price upside from the stated current price.
• Price per exabyte growth~11% YoYIncrease reported for the prior quarter.
• HAMR volume mix80%-90%Management expectation within a few years.
• FY27 incremental gross marginAt least 70%Goldman Sachs expectation, supported by HAMR, internal lasers and pricing.
• FY27E revenue$18,864.5 millionGoldman Sachs forecast, versus $12,195.0 million in FY26.
• FY27E EPS$35.09Goldman Sachs forecast, versus $14.83 in FY26.

Impact & implications

The report argues that stronger pricing, the HAMR transition and cost benefits can support sequential revenue and EPS growth through FY27. It also views debt retirement followed by greater share repurchases as the company’s preferred excess-capital return path.

Risks

• HAMR may face difficulties qualifying at major hyperscalers.
• Seagate or the broader industry may fail to maintain supply-side discipline.