Summary
Seagate Technology Holdings provides hard disk drives (HDDs) for the personal computer, enterprise server, storage, retail, and consumer device markets. In December 2011, Seagate completed the acquisition of Samsung’s HDD business for $1.4 billion in cash and stock. In calendar 2014, Seagate acquired Xyratex and LSI’s SSD assets. In 2018, Seagate invested $1 billion in the Bain consortium to assure adequate NVM supply. Kioxia, the successor company to Toshiba Memory, has since bought out that investment, while retaining NVM supply agreements with Seagate.
INUSTRY
Our rating on the Information Technology sector is Over-Weight. Consumer electronics demand, which was reduced by inflation, is now showing signs of recovery. IT demand in enterprise and data center markets weakened after consumer demand but now also shows signs of recovery, fueled by mounting interest in generative AI.
As of the end of June, the sector accounted for 33.1% of the S&P 500. Over the past five years, the weighting has ranged from 16% to 33%. The sector was overperforming the market, with a gain of 7.7%. The sector outperformed in 2024, with a gain of 35.7% compared to a gain of 23.3% for the S&P 500.
The sector’s P/E ratio on projected 2026 EPS was 26, above the market multiple. Yields of 0.2% were below the market average. The sector’s smoothed earnings growth rate of 15% was above the market average.
Over the long te