Seagate Technology Holdings (STX): Among Overlooked Tech Stocks to Buy Now

We recently published a list of 10 Overlooked Tech Stocks to Buy Now. In this article, we are going to take a look at where Seagate Technology Holdings plc (NASDAQ:STX) stands against other overlooked tech stocks to buy now.

After overcoming major macroeconomic challenges, the IT sector has started 2025 with fresh vigor. The tech sector is now ready for a resurgence after a period of instability characterized by high inflation, rising interest rates, and worldwide unpredictability. The sector is expected to be “healthy” or “very healthy” in 2025, according to 62% of tech executives polled by Deloitte. Global IT spending is expected to increase by 9.3%, driven mostly by double-digit growth in software and data center investments. As companies move AI initiatives from pilot projects to full-scale production deployments, analysts anticipate that generative AI, cybersecurity, and cloud services will continue to be important growth drivers.

The rate of layoffs dropped significantly in 2024, indicating growing stability. But new difficulties have surfaced, especially in relation to geopolitical tensions and regulatory barriers. The world economy is already feeling the effects of President Trump’s expansive tariff plans, which include additional charges on major tech manufacturing countries like Taiwan, India, and Vietnam that range from 26% to 49%. Although imports of semiconductors, which are essential for the development of AI, have been temporarily exempted, tech companies that rely on international supply chains face new risks as a result of the unstable trade policy climate.

Meanwhile, generative AI is proving to be a double-edged sword. While it is projected to contribute 21% to U.S. GDP by 2030, as reported by the World Economic Forum, there are growing concerns about the technology displacing millions of jobs, particularly administrative roles. As the World Economic Forum highlights, the solution lies not in halting AI innovation but fostering “Authentic Intelligence”—an approach emphasizing the collaboration of human critical thinking with AI’s capabilities to ensure inclusive economic growth.

Additionally, cybersecurity has become a significant priority on the strategic agenda. As the use of AI increases, so does the attack surface available to hackers. By 2028, it’s expected that global spending on cybersecurity will exceed $200 billion, as businesses emphasize bolstering their defenses. However, only 24% of existing gen AI projects are thought to be sufficiently secure, indicating that trust is still a major obstacle to the widespread use of AI.

In summary, despite the fact that 2025 holds great promise for the IT industry due to advancements in generative AI, cloud migration, and robust IT investment, businesses still have to deal with a complex web of ethical, geopolitical, and legal issues. Successful companies will strike a balance between daring technological innovation, careful risk management, strategic supply chain diversity, and a dedication to upholding stakeholder and customer confidence.

Against this dynamic backdrop, let’s look at 10 Overlooked Tech Stocks to Buy Now, which are not only ready to capitalize on upcoming opportunities but may also provide attractive upside potential for investors seeking beyond the conventional mega-cap giants.

Methodology

To find overlooked tech stocks, we started by looking for companies with a market capitalization greater than $5 billion, ensuring a concentration on financially strong, large-cap enterprises. We chose stocks from this category that had a price-to-earnings (P/E) ratio of less than 15, using the P/E ratio as a conventional valuation indicator to highlight relatively affordable earnings-driven stocks. We then evaluated these firms based on hedge fund sentiment, utilizing data from Insider Monkey’s fourth quarter 2024 report. Finally, we chose the ten companies with the least number of hedge fund investors to represent our list of Overlooked Tech Stocks to Buy Now.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Seagate Technology Holdings plc (NASDAQ:STX)

P/E Ratio: 9.56

Hedge Fund Holders: 11

Seagate Technology Holdings plc (NASDAQ:STX) is a global pioneer in data storage solutions, offering hard disk drives, solid-state drives, and storage systems for the cloud, edge, and business markets worldwide. Seagate, founded in 1978 and based in Singapore, is a key player in facilitating digital transformation by providing scalable storage infrastructure to support today’s tremendous data growth.

Seagate Technology Holdings plc (NASDAQ:STX) ended calendar 2024 with solid momentum, growing revenue by 7% sequentially and posting non-GAAP earnings per share above $2 for the first time in 12 quarters. Seagate’s nearline product revenue nearly doubled year-over-year, due to strong demand, particularly from cloud clients. Mass capacity products continue to drive growth, with nearline shipments up 9% sequentially to 140 exabytes. Total December quarter revenue was $2.33 billion, with non-GAAP gross margin increasing by 220 basis points to 35.5%, representing the seventh consecutive quarter of sequential increase.

Seagate Technology Holdings plc (NASDAQ:STX) is benefiting from the ramp of its Mozaic HAMR-based platform, which has industry-leading capacities of up to 36 terabytes. Multiple cloud and hyperscale clients have already qualified these drives, paving the way for a considerable volume increase in the latter part of 2025. Management anticipates GenAI applications to be a long-term driver of mass capacity storage development, with AI-generated data expected to increase 170 times between 2024 and 2028.

Seagate Technology Holdings plc (NASDAQ:STX) also finalized the strategic acquisition of Intevac for about $96 million on March 31, 2025, which will boost its thin-film production capabilities. Meanwhile, the company continued its focus on capital discipline, generating $150 million in free cash flow and retiring $479 million in debt in early January, leaving no significant obligations until late fiscal 2027.

Despite temporary supply difficulties in the March quarter, Seagate Technology Holdings plc (NASDAQ:STX) is still well-positioned, with robust customer demand and an attractive technology roadmap. Given its critical position in facilitating AI-driven mass storage needs, Seagate appears to be an overlooked tech stock poised to benefit from the next wave of data expansion.

Overall, STX ranks 1st on our list of overlooked tech stocks to buy now. While we acknowledge the potential of STX, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than STX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.