Seagate Technology Is Soaring After Its Strong Earnings Report.
Should You Buy Western Digital Before Its Earnings Report?
Storage and memory stocks had experienced pullbacks amid broad macroeconomic jitters and valuation concerns surrounding artificial intelligence (AI) hardware trades. Then came Seagate Technology (NASDAQ: STX) with a strong fourth-quarter, beat-and-raise performance, lifting the stock by more than $100 between its close on July 28, when it announced earnings, and its close on July 30. Because Seagate and Western Digital (NASDAQ: WDC) operate as a tight duopoly in the high-capacity, hard disk drive (HDD) market, Seagate’s performance offers clear visibility into the underlying health of the data storage industry and Western Digital’s own performance.
That’s good news for investors in Western Digital, which reports its Q4 results on Aug. 5. Its shares rose 15% between the stock’s close on July 28 and its close on July 30. Here are three reasons why Western Digital’s stock could jump higher after it reports earnings, and one reason it won’t: Seagate blew past analysts’ consensus estimates Seagate reported a 48% year-over-year Q4 revenue surge, driven primarily by cloud data centers and hyperscalers purchasing high-capacity nearline drives for AI workloads.