Seagate's Production Lines Are Booked Solid Until 2027 — and the Stock Is Paying the Price of Success

Seagate shares surge 10% to record €628 as nearline hard drive demand from AI and cloud customers pushes factories to full capacity through 2027.

Seagate Technology has a problem most companies would envy: its factories are running at full capacity through the end of 2027, and customers are still queuing up. The storage giant's shares surged nearly 10% on Monday to hit a fresh all-time high of €628, extending a rally that has seen the stock more than double since the start of the year.

The latest leg higher came after the company reported fiscal third-quarter results that blew past Wall Street expectations. Revenue for the period ending in April reached $3.11 billion, a 44% year-over-year jump that comfortably exceeded consensus estimates. GAAP gross margins expanded to 46.5%, up from 41.6% in the prior quarter. Earnings per share came in at $4.10.

The numbers tell a story of a company riding a single, powerful wave: the insatiable demand for nearline hard drives powering cloud and artificial intelligence infrastructure. CEO Dave Mosley described the current environment as "a new era of structural growth," and the order books back him up. Build-to-order contracts with long-term pricing commitments are providing a level of revenue visibility Seagate has never enjoyed before.

Portfolio expansion meets data center dominance

To capitalise on the boom, Seagate is rolling out new hardware. The "One Touch" external drive series now offers capacities up to 24 terabytes, while its LaCie subsidiary is launching a RAID system capable of holding 256 terabytes. Both lines leverage Thunderbolt 5 and USB-C technology for high-speed data transfer.

But the real action is elsewhere. Roughly 80% of Seagate's total revenue now comes from data center customers, a shift that underscores how deeply the company has embedded itself in the AI infrastructure supply chain. Fitch recently upgraded Seagate's credit rating to investment grade, reflecting the improved financial profile.

For the current quarter, management has guided for revenue of $3.45 billion and earnings per share of $5.00. Institutional ownership stands at over 92%, signalling confidence among large investors.

The overheating risk

Yet the stock's rapid ascent has created a technical vulnerability. The relative strength index has climbed above 80, a level that historically signals overbought conditions and often precedes a pullback. Since hitting a 52-week low of €82.53, the shares have roughly septupled — a gain that has left some analysts questioning how much more upside remains in the near term.

The fundamental picture remains robust, however. Production capacity is fully booked years in advance, and the structural demand from AI and cloud computing shows no signs of abating. For Seagate, the challenge may not be finding customers — it may be managing the expectations that come with being one of the market's hottest names.