Why One of the Best Stocks of 2025 Looks Unstoppable in 2026

Seagate Technology (NASDAQ: STX) banal was soaring connected Wednesday, rising immoderate 20% successful aboriginal trading aft the institution released blowout fiscal second-quarter net aft the marketplace closed Jan. 27.

For this high-flying artificial quality (AI) stock, it's a continuation of the breakout occurrence it had successful 2025 arsenic 1 of the best-performing stocks connected the S&P 500. Seagate returned 225% successful 2025, and it's already up a ridiculous 61% twelvemonth to date.

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Over the past 12 months, Seagate banal has risen 343%. And the bully quality for investors is that it doesn't look to beryllium slowing down anytime soon.

Seagate and its main rival, Western Digital, were 2 of the champion S&P 500 stocks past year, each returning successful excess of 200%.

These 2 companies, which marque high-capacity hard disk drives chiefly for information centers, are the ascendant players, splitting astir 80% of the marketplace stock successful this space. That puts them successful a premier presumption to capitalize connected the AI roar and the increasing request for information centers and storage.

In the fiscal 2nd quarter, Seagate generated $2.8 cardinal successful revenue, a 22% summation twelvemonth implicit twelvemonth that bushed analysts' estimates. Net income surged 76% to $593 million, oregon $2.60 per share. On an adjusted basis, nett income roseate 62% to $433 million, oregon $3.11 per share, which blew distant estimates of $2.84 per share.

Its adjusted net were a caller record, arsenic were its 41.6% gross borderline and 29.8% operating margin.

The third-quarter guidance called for gross of $2.9 billion, which was beyond estimates of $2.79 billion. Further, Seagate anticipates non-GAAP (adjusted) diluted EPS of $3.40, positive oregon minus $0.20. This crushes estimates of $3.01 per share.

Wall Street analysts were speedy to rise the terms targets for Seagate banal aft the net report. Some 10 antithetic analysts boosted their targets, led by Morgan Stanley, which lifted it by $96 to $468 per share, and Cantor Fitzgerald, which lifted it by $100 to $500 per share.

On the net call, Seagate Chair and CEO William Mosley said request has been "exceptionally strong," and that orders are wholly booked for 2026 already, and the institution volition beryllium taking orders for 2027 soon.

"Further out, request visibility is strengthening based connected the semipermanent agreements successful spot with large unreality customers done calendar '27," helium said. "Additionally, aggregate unreality customers are discussing their request maturation projections for calendar '28, underscoring that proviso assurance remains their highest priority."