Seagate's HAMR Bet is Paying Off: Can Mozaic Sustain the Momentum?

Seagate Technology Holdings plc’s STX technology roadmap is key to its ability to capitalize on rising storage demand. STX’s expertise in materials science, precision manufacturing, photonics and wafer production has driven HAMR and the Mozaic platform, while vertical integration in laser manufacturing further strengthens its technology edge.

Seagate’s areal-density roadmap enables it to expand exabyte output without materially increasing hard-drive unit production. This improves capital efficiency and lowers customers’ cost and power consumption per terabyte. HAMR-based products accounted for approximately 40% of Seagate’s nearline exabyte shipment run rate at the end of fiscal 2026. Mozaic 3 products are qualified and operating across all major cloud customers, while the second-generation Mozaic 4 platform, capable of supporting capacities up to 44 terabytes, is ramping with the two largest global cloud service providers.

Seagate expects 50% of HAMR exabytes to come from Mozaic 4 by the end of calendar 2026. Mozaic 5 qualification shipments remain on track for late calendar 2027. Higher-capacity products should also benefit profitability. The transition from three-terabyte-per-disk to four-terabyte-per-disk products provides additional cost efficiencies, while tight industry supply is supporting favorable pricing on incremental exabyte availability.

Seagate delivered strong double-digit year-over-year growth in both revenue and exabyte shipments in the enterprise OEM market during the June quarter. The company is expanding HAMR across its portfolio, initially targeting cloud customers and gradually broader enterprise adoption. Investments in HAMR manufacturing tools should support higher-capacity drives while keeping unit output relatively stable, enabling mid-20% nearline exabyte growth over the next few years.

How STX Stacks Up Against Market Peers in the Storage Circle

Western Digital Corporation WDC is developing and deploying higher-capacity ePMR, UltraSMR and HAMR drives, along with high-bandwidth drive technology for data-intensive workloads. Its product roadmap includes ePMR drives with capacities up to 40 TB, 44-TB HAMR products planned for the first half of calendar 2027 and 50-TB products planned for the second half of calendar 2027. WDC expects the 40-TB ePMR transition, wider UltraSMR adoption and subsequent HAMR introduction to expand the number of exabytes it can deliver without adding unit capacity. Management also cited increased enterprise OEM interest in hybrid storage systems and is working with those customers on UltraSMR, next-generation ePMR and HAMR adoption.

Micron Technology MU is benefiting from AI-driven demand for memory and storage, tighter DRAM and NAND supply and a richer mix of HBM, data center SSD and high-capacity products. Micron’s technology roadmap is strengthening its exposure to high-value memory solutions used in AI, machine learning and data analytics. Its 1-gamma DRAM node and G9 NAND node are ramping up well and are on track to become the highest-volume nodes in Micron’s history. Development of next-generation DRAM and NAND nodes is set to begin volume production in the second half of calendar 2027. These advances deepen Micron’s role in data center, client, mobile and automotive platforms.

STX Price Performance, Valuation and Estimates

In the past year, STX shares have skyrocketed 368.5%, outperforming the Computer Integrated Systems industry’s growth of 201.3%.

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Going by the price/earnings ratio, the company’s shares currently trade at 22.61 forward earnings compared with 12.11 for the industry.

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STX is currently witnessing an uptrend in estimate revisions. Earnings estimates for fiscal 2027 have been revised up 28.7% to $36.09 over the past 60 days, while estimates for fiscal 2028 have risen 17.8% to $58.28.

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STX currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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