The Zacks Analyst Blog Highlights Seagate Technology and NVIDIA

For Immediate Release

Chicago, IL – August 14, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Seagate Technology Holdings plc STX and NVIDIA Corporation NVDA.

Here are highlights from Thursday’s Analyst Blog:

The AI Stock Nobody Is Talking About - but Could Be a Big Winner

Being an old-school hard disk drive (HDD) company, Seagate Technology Holdings plc may have been overlooked by investors despite its recent growth momentum. Its shares have gained 217.5% this year, easily surpassing several major players in the artificial intelligence (AI) ecosystem, including Wall Street darling NVIDIA Corporation, which registered more subdued gains of 19.8%.  

The key reason behind Seagate’s bullish momentum is the rapid rise in AI, which is driving massive data-storage demand and in turn creating a significant tailwind for Seagate. 

Let us thus see what is driving Seagate’s growth, and why it could be the next big winner, making the stock a compelling buy –  

Seagate: AI Demand Drives Growth and Margin Expansion 

The AI-driven data growth is increasing hyperscalers’ demand for high-capacity HDDs, leading to stronger pricing and higher margins for Seagate. In the fiscal year 2026, Seagate’s gross margin increased significantly to 45.6% from 35.2% a year ago, according to investors.seagate.com. The improvement was even more noteworthy in the fiscal fourth quarter of 2026, when gross margin was 52.3% compared with 37.4% in the fiscal fourth quarter of 2025.  

Seagate’s revenue growth has also been exceptional. The company’s revenues for fiscal year 2026 were $12.2 billion, up roughly 34% year over year. For the fiscal fourth quarter of 2026, revenues were $3.63 billion, up approximately 49% year over year. The strong revenue growth is particularly attributable to high AI-driven storage demand. More importantly, Seagate is not only growing its top line but also expanding its margins, allowing the company to earn more profit per dollar of revenue, which is highly valuable for shareholders. 

The most bullish aspect is the company’s fiscal first-quarter 2027 guidance. Management expects revenues for the fiscal first quarter of 2027 to increase to $4.1 billion, plus or minus $100 million. Profitability is expected to strengthen as well, with non-GAAP earnings per share (EPS) projected at $7.30, up from $5.71 reported in the fiscal fourth quarter of 2026. Both indicate that Seagate’s growth momentum is expected to continue into fiscal year 2027, and hasn’t slowed down after a superb fiscal 2026. 

Seagate’s cash generation is excellent; it has registered a free cash flow of $3.1 billion in fiscal year 2026, which will help the company reduce its debt burden and reinvest in HAMR/Mozaic technology. Anyhow, the company is maintaining a strong balance sheet as its debt burden has declined by $1.4 billion to $3.6 billion in fiscal year 2026. 

Why Seagate Could Be the Next Big Winner and a Strong Buy 

Strong AI-driven storage demand, expanding margins, increasing revenues and EPS, and a strong cash flow position set Seagate to be the next big winner in the AI infrastructure boom.  

At the same time, Seagate remains more efficient at generating profits than its peers. This is because Seagate’s return on equity (ROE) of 386.9% exceeds the Computer - Integrated Systems industry’s ROE of 33.4%.

All these factors make Seagate a solid buy, backed by its Zacks Rank #1 (Strong Buy) and an impressive 124.6% expected earnings growth rate for the current year. You can see the complete list of today’s Zacks Rank #1 stocks here.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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