Tech · $STX
Seagate Slides After Hours Despite Record Quarter and Upbeat Guidance
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The hard-drive maker beat forecasts and guided above consensus, but the stock fell roughly 7% in early extended trading after a strong day.
By Emmanuel Cruz ·
Seagate Technology shares fell in extended trading on Tuesday even after the data-storage company reported record profitability and issued a forecast well above Wall Street expectations, a sign of how much optimism was already built into a stock closely tied to AI data-center spending.
For its fiscal first quarter, which ended October 2, Seagate posted revenue of $4.23 billion, up about 61% from $2.63 billion a year earlier [1]. Adjusted earnings were $7.68 a share, compared with $2.61 a year ago, and earnings under standard accounting rules were $7.59 a share [1]. Analysts had expected revenue of about $4.14 billion and adjusted earnings of about $7.40 a share [2]. The company's own prior guidance had called for $4.10 billion in revenue and $7.30 in adjusted earnings per share [2].
Margins widened sharply. Adjusted gross margin reached 57.8%, up from 40.1% a year earlier, and free cash flow came to $1.48 billion [1]. Chief Executive Dave Mosley said the quarter brought "record profitability" and the company's highest-ever free cash flow for a September quarter [1]. Chief Financial Officer Gianluca Romano said incremental gross margin ran well above 60%, according to a live blog of the results [2]. Seagate also raised its quarterly dividend by about 3% to 76 cents a share [1].
Guidance for the December quarter topped consensus as well. Seagate forecast revenue of $4.8 billion, plus or minus $100 million, and adjusted earnings of $9.20 a share, plus or minus 20 cents [1]. Analysts had been looking for $4.53 billion and $8.58, respectively [2].
The stock still moved lower. Shares had climbed close to 5% during the regular session and closed at $667.85, then fell about 7% shortly after the report and traded as low as $613.50 in extended trading [2][3]. Shacknews noted that while earnings beat the consensus estimate, they fell short of a whisper number of $7.75 a share [3]. Some analysts had also floated far more aggressive targets ahead of the report: Investing.com cited projections for December-quarter revenue above $4.9 billion and earnings of $9.75 a share or more [4].
The setup going into the print helps explain the reaction. Hyperscale cloud providers building AI infrastructure have driven heavy demand for Seagate's high-capacity drives, and manufacturers were described as essentially sold out through 2026 [4]. That demand pushed the shares as high as about $1,145 earlier this year, but the stock was about 44% below that peak before Tuesday's session [4] and had dropped roughly 25% over the past month [2], as investors questioned the durability of AI spending. Management said cloud customers were showing no sign of a slowdown in storage capacity growth [2].
What to watch next: whether the after-hours decline holds into Wednesday's regular session, and whether the December-quarter forecast is enough to steady a stock that has swung sharply on shifting views of AI infrastructure demand.
Sources:
[1] Seagate Technology via Yahoo Finance, "Seagate Technology Reports Fiscal First Quarter 2027 Financial Results", October 27, 2026. https://ca.finance.yahoo.com/news/seagate-technology-reports-fiscal-first-200500317.html
[2] 24/7 Wall St., "Live: Will Seagate Technology Smash Q1 Earnings Tonight After 5% Intraday Jump?", October 27, 2026. https://247wallst.com/investing/2026/10/27/live-will-seagate-technology-smash-q1-earnings-tonight-after-5-intraday-jump/
[3] Shacknews, "Seagate (STX) Q1 FY27 earnings results beat revenue estimates, EPS miss whisper number expectation", October 27, 2026. https://www.shacknews.com/article/151163/seagate-stx-q1-2027-earnings-results
[4] Investing.com, "Seagate faces earnings test as AI storage boom lifts expectations", October 27, 2026. https://www.investing.com/news/earnings/seagate-faces-earnings-test-as-ai-storage-boom-lifts-expectations-93CH-4976386
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.