Shares of memory and storage chipmakers surged sharply on Wednesday after Seagate Technology Inc. (NASDAQ:STX) delivered a major earnings beat, extending an already explosive rally fueled by a global storage supply crunch as AI-driven demand continues to crowd out available capacity.



Seagate jumped more than 15% after reporting blockbuster quarterly results that topped Wall Street expectations across the board.



The rally quickly spilled over to peers.



Sandisk Corp. (NASDAQ:SDNK) and Western Digital Corp. (NASDAQ:WDC) each climbed more than 6%. Year to date, Sandisk is up 84% and Western Digital has gained 40%.



Since its February 2025 initial public offering, Sandisk has surged more than 1,330%, matching the returns Nvidia Corp. (NASDAQ:NVDA) delivered since November 2022, when ChatGPT launched.



<h2>Chart: Sandisk Matched Nvidia’s Returns Since ChatGPT In Less Than A Year As Memory Chip Crisis Worsens</h2>



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<h2>Seagate Smashed Earnings Expectations – What You Need To Know</h2>



Seagate reported earnings per share of $3.11, well above expectations of $2.83. From a year earlier, earnings jumped 53%.



Revenue reached $2.83 billion, topping the $2.74 billion consensus estimate and rising 21% year over year. Margins also surprised to the upside, with gross margin coming in at 42.2%.



The company guided for even stronger numbers ahead. For the current quarter, Seagate expects $2.90 billion in revenue at the midpoint, far ahead of the Street’s $2.81 billion. Operating EPS is projected at $3.40—above the consensus estimate of $3.03.



In a note on Wednesday, Goldman Sachs analyst James Schneider raised his price target on the stock from $310 to $385. 



<h2>AI Boom Fuels Tight Supply, Firm Pricing</h2>



&#34;Management noted that its production capacity is now sold out for 2026, and it expects key hyperscaler customers to begin placing orders for 2027 in the near future,&#34; Schneider said.



The tight supply-demand dynamic has allowed the firm to raise prices per terabyte and boost margins, with management forecasting sequential EPS and revenue growth through 2026.



“Seagate reported a modest increase in price per Terabyte in the quarter, and management expects a further increase this quarter,” Schneider added.



&#34;We believe management’s intent to not add unit production capacity should underpin investor confidence in a tight supply environment for the foreseeable future,&#34; Goldman said.



Seagate also showed progress in its heat-assisted magnetic recording (HAMR) technology. The company shipped 1.5 million HAMR drives last quarter, up from 1 million previously, and has now qualified its Mozaic 3 with all major U.S. hyperscalers.



Analysts remain bullish. &#34;We see Seagate as a key beneficiary of persistent industry tightness and firm pricing trends,&#34; Schneider said, though he flagged potential risks like supply overshoots or slow customer adoption of new tech.



Image: Shutterstock

NVDA

SNDK

Seagate Technology Inc. reported a significant earnings beat, with shares jumping over 15%. This surge is part of a broader rally in memory and storage chipmakers driven by AI-related demand and a global supply crunch. Sandisk and Western Digital also saw gains, with Sandisk's stock rising 1,330% since its IPO. Seagate's earnings per share reached $3.11, exceeding expectations, and the company anticipates continued revenue growth. Analysts remain optimistic about Seagate's position in a tight supply environment, despite potential risks.

- Shares of memory and storage chipmakers surged after Seagate Technology reported earnings per share of $3.11, exceeding expectations and driving a rally in the sector.  
- Seagate's revenue of $2.83 billion also topped forecasts, and the company guided for stronger upcoming performance amid a global storage supply crunch driven by AI demand.  
- Analysts noted that Seagate's production capacity is sold out for 2026, allowing for price increases, while the company made progress in its heat-assisted magnetic recording technology.

Nvidia Took 3 Years To Gain 1,330% — This Memory Stock Needed 11 Months