Seagate (STX) stock has surged by 225% this year due to AI tailwinds. The company will join the Nasdaq-100 Index, likely increasing buying activity. Seagate’s strong demand for HDDs is expected to drive revenue growth and margin expansion. The company reported a 21% YoY revenue growth to $2.63 billion for Q1 2026.

Seagate, based in Fremont, California, offers mass-capacity data storage solutions. The company’s Q2 2026 revenue guidance is $2.7 billion, supported by robust data center market demand. With a 115% surge in the past six months, STX stock has shown healthy growth, positive industry trends, and strong cash flows.

In Q1 2026, Seagate reported $1.1 billion in cash and $1.3 billion in undrawn credit. The company’s gross debt of $5 billion with low leverage at 1.5x and a healthy interest coverage ratio of 8.6x. Seagate also reported operating and free cash flow of $532 million and $427 million, respectively.

Seagate offers a $2.88 annualized dividend per share with potential increases due to growing cash flows. The company is investing in innovation-driven growth, such as Mozaic HAMR products. Analysts rate STX stock as a consensus “Strong Buy” with a mean price target of $293.86, implying a 5% upside potential.

Seagate’s focus on advancing areal density and innovation drives its competitive edge. Analysts foresee robust earnings growth outlook with higher volumes and margin expansion. STX stock is positioned to deliver an EPS of $17 for FY 2027, supporting a $341 bull-case price target and a 22% upside potential. STX stock trades at a forward (FY 2027) P/E ratio of 16.8, indicating reasonable valuations amidst positive tailwinds.

Read more at Yahoo Finance: Seagate Stock Is Up 225% in 2025. 1 Reason to Buy Shares Before December 22.