The Open Question Under Seagate Stock’s Price
Seagate Technology (STX) has been raising the price of its hard disks, but maintaining those increases could get difficult if storage becomes easier to buy. This matters at today’s share price, because the stock trades at 56.9 times earnings, compared to 21.5 for the S&P 500. Now, a competitor’s expansion plan has investors worried about Seagate’s pricing power.
Seagate Raises Prices When Supply Runs Short
That competitor is Toshiba, and its plan would add supply to the market. According to Nikkei, Toshiba plans to double its production capacity for the drives used in AI data centers in fiscal 2027 (which starts in April 2027).
This potential influx of supply matters because of how Seagate grows. Executives have stated their strategy is to keep the overall number of hard disks they manufacture flat. Consequently, Seagate’s revenue grows when it fits more storage into each disk and charges higher prices for that storage.
Seagate has been able to charge more while storage is scarce. Executives noted that the gap between supply and demand has widened. During the fiscal Q4 2026 call on July 28, 2026, analysts asked about pricing, including how far ahead the company can see its prices. If a competitor fills part of that gap, Seagate may find it has less room to raise prices.
Data Centers Are Seagate’s Largest Market
Data centers accounted for $2.9 billion of Seagate’s $3.6 billion in revenue during the June 2026 quarter. That data center revenue grew 57% from a year earlier, and it represents the market where Toshiba reportedly plans to expand.
Seagate’s profit has climbed alongside that revenue. Over the fiscal year ended July 3, 2026, Seagate recorded an operating margin of 34%, up from 21% a year earlier.
The company guided for continued growth in the September quarter, which recently ended with results still pending. Executives forecast revenue of $4.1 billion, plus or minus $100 million, compared to the $3.6 billion reported for June.
What Has Seagate Locked In With Customers?
Seagate does have contracts that fix prices through the end of 2027. Executives stated that these agreements define both product configuration and pricing for the entirety of calendar 2027. Furthermore, the company has allocated the vast majority of its nearline storage volume into calendar 2028 under long-term supply agreements.
However, executives have also noted that customers buying extra volume beyond their contracts are signing up to prices higher than some contract prices. These elevated prices appear the most exposed if storage becomes easier to buy. Regarding where prices go next, executives maintain that every quarter is different and they will monitor how pricing evolves over the following few quarters.
Upcoming earnings calls, starting with the one for the September 2026 quarter, will be the place to watch for contracts that fix prices for calendar 2028. Agreements like that would show customers still agreeing to Seagate’s prices with Toshiba’s plan in view.
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