Seagate Technology (STX)

Nearline HDD storage — mass-capacity drives for AI data lakes (Seagate)

AI exposure 55% — derived from reported segment revenue, not asserted.

Where it sits

Physical Infrastructure → Storage & Server Systems · figures rebased to FQ4 FY2026, reported 2026-07-28

Mass-capacity nearline HDDs for cloud/data centers (Mozaic HAMR) — AI data storage leads 2 businesses in this sub-tier that together are 100% of revenue, so Storage & Server Systems is effectively the whole company rather than one leg of it.

Reported segments

• Hard disk drives (by market) — 100% of revenue

Seagate ($12.2B FY2026, +34%) — hard disk drives. Mass-capacity nearline HDDs ~80% (data-center customers >80% of revenue / ~90% of exabytes; Mozaic HAMR ramp = the AI-relevant core — AI data lakes need cheap mass storage; nearline capacity fully allocated through CY2027 under build-to-order contracts, order visibility to 2029). Legacy/edge ~20%. Primary B2 Storage & Server Systems. AI driving nearline demand. Competes WDC/Toshiba in HDD; supplies hyperscalers (MSFT/AMZN/GOOGL/META).

How the 55% is built

• Hard disk drives (by market) — 100% of revenue × 55% AI-driven (estimate). Seagate disclosed data-center revenue of $2.9B in FQ4 FY2026 = 81% of the $3.6B quarter, with data centers ~90% of exabyte shipments and nearline exabytes +43% YoY on the HAMR/Mozaic ramp; roughly two-thirds of that data-center revenue is judged AI-data-pipeline driven, the remainder ordinary cloud and enterprise bulk…

Investment read

Moat. HDD duopoly (with WDC) + HAMR technology transition; nearline/mass-capacity storage is structurally needed for AI training data + checkpoints.

Bottleneck / pricing power. Pricing power now proven, not just improving: record 52.7% GM / 44.6% OM (FQ4 FY2026) with a ~50% OM aspiration, nearline capacity fully allocated through CY2027 on build-to-order contracts and order visibility to 2029 — HAMR density lead + duopoly discipline have repriced HDD economics.

Role in the AI stack. The mass-capacity storage layer for AI data lakes.

Connected companies

• Dell Technologies (DELL) — STX supplies: mass-capacity HDD
• Amazon (AMZN) — STX supplies: mass-capacity HDDs for AWS cloud storage
• Microsoft (MSFT) — STX supplies: nearline HDDs for Azure storage
• Alphabet (GOOGL) — STX supplies: high-capacity nearline/HAMR HDDs qualified and deployed at Google Cloud
• Western Digital (WDC) — STX competes with: HDD mass-capacity duopoly
• Meta Platforms (META) — STX supplies: nearline HDD storage for META AI data centers
• Oracle (ORCL) — STX supplies: nearline HDD storage for ORCL AI data centers
• CoreWeave (CRWV) — STX supplies: nearline HDDs behind CoreWeave's HDD storage tiers (largely via Backblaze/integrators)
• Lynas Rare Earths (LYC) — STX is supplied by: rare-earth magnets for Seagate HDD motors
• MP Materials (MP) — STX is supplied by: NdFeB magnets are used in HDD voice-coil motors, but MP's magnet supply is not evidenced as reaching Seagate
• Hitachi (HTHIY) — STX competes with: Named as a core rival in STX's value chain: Enterprise storage systems competitor targeting same data center customers
• NetApp (NTAP) — STX supplies: Named as a supplier in NTAP's value chain: supplies high-capacity HDDs used in NetApp FAS hybrid storage systems
• IBM (IBM) — STX supplies: Named as a supplier in IBM's value chain: IBM buys hard drives and storage components for infrastructure products

Others in Storage & Server Systems

• Western Digital (WDC)
• NetApp (NTAP)
• Everpure (fmr Pure Storage) (P)
• Dell Technologies (DELL)
• Hewlett Packard Enterprise (HPE)
• Super Micro Computer (SMCI)

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