Seagate Stock Falls About 6% After Hours Despite Record Profit and Strong AI Storage Demand

The hard drive maker is selling nearly everything it can make to data centers, yet its shares slipped after the report.

What did Seagate report, and how did the stock react?

Seagate Technology (STX) reported record adjusted earnings of $7.68 a share on Tuesday, Oct. 27, 2026, beating the $7.39 analysts expected, on revenue of $4.23 billion, up 61%. It also forecast an even bigger December quarter. Even so, the stock fell about 5% to 6% in after-hours trading.

Seagate released the results after the market closed, according to its earnings release filed with the SEC. The quarter was the first of its 2027 fiscal year and ended Oct. 2. Revenue was $4.233 billion, compared with $2.629 billion a year earlier. Adjusted earnings per share more than doubled from $2.61, and on a standard accounting basis the company earned $7.59 a share.

The shares had risen 3.67% during Tuesday's regular session to close at $667.85, part of a strong day for tech stocks that we covered in our Nasdaq market wrap. After the report, they fell 5.44% to $631.50, Investing.com reported, and a separate Investing.com report showed a 5.91% drop to $628.38. Analysts had expected revenue of $4.13 billion, according to that report.

Why is demand for hard drives booming?

Artificial intelligence runs on data, and that data has to be stored somewhere. Seagate's biggest customers are cloud companies that fill data centers with "nearline" drives, high-capacity hard drives that hold huge amounts of information at a lower cost per terabyte than faster flash storage.

Data center revenue was $3.4 billion, up 63% from a year earlier and 81% of the total, according to a Yahoo Finance summary of the earnings call. Seagate shipped 220 exabytes of storage, including 198 exabytes to data center customers. One exabyte is a billion gigabytes.