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

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.

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

Seagate Smashed Earnings Expectations – What You Need To Know

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.

AI Boom Fuels Tight Supply, Firm Pricing

"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," 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.

"We believe management’s intent to not add unit production capacity should underpin investor confidence in a tight supply environment for the foreseeable future," 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. "We see Seagate as a key beneficiary of persistent industry tightness and firm pricing trends," Schneider said, though he flagged potential risks like supply overshoots or slow customer adoption of new tech.

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