Seagate posted 48% revenue growth on AI infrastructure storage demand with customers extending capex plans through 2029 and beyond.

Seagate Technology delivered a significant win for the AI infrastructure sector with strong fiscal fourth-quarter results driven by hard drives, an unlikely cornerstone of the AI buildout.

Seagate's shares had declined roughly 8% heading into Tuesday's earnings print as investors reassessed stretched valuations across chip and storage names. The company's results reversed that sentiment. Revenue climbed 48% year over year to $3.63 billion, beating Wall Street estimates near $3.5 billion. Non-GAAP earnings per share came in at $5.71, well above analyst expectations of $5.10.

The earnings beat underscores that Seagate is not merely expanding volume. Non-GAAP gross margin jumped to 52.7% from 37.9% a year earlier, demonstrating significantly improved profitability per unit. The company also generated a record $3.1 billion in free cash flow for the full fiscal year, capital available for debt reduction, shareholder returns, or reinvestment in its AI storage initiatives.

CEO Dave Mosley attributed the performance to durable cloud demand. "Our performance is being driven by robust cloud data center demand and disciplined execution, and we see the momentum continuing in 2027," he said.

Management's forward guidance reinforced the optimistic outlook. Seagate expects $4.1 billion in revenue for the next quarter, materially above analyst estimates near $3.8 billion.

The results arrive as memory chip stocks face headwinds from concerns that AI infrastructure buildout is overheating, with declines persisting even after strong earnings from SK Hynix and Samsung. Seagate's performance suggests underlying demand for AI-driven data storage remains robust, even as investor sentiment around the sector has turned cautious. Whether that confidence holds will depend on whether Seagate achieves its ambitious forward guidance in the coming quarter.