TLDR
- Seagate stock dropped 7.5% on Monday after CEO Dave Mosley said building new factories would “take too long.”
- Mosley said Seagate is focused on technology transitions — moving to higher-density platters — rather than adding manufacturing floor space.
- Recording head wafers already have lead times of over nine months, with drives taking an additional quarter to produce.
- The company has shifted to a build-to-order model with visibility four to five quarters out.
- Seagate’s Mozaic 3 HAMR technology is qualified at all planned cloud providers, with 50% exabyte crossover expected in the second half of 2026.
Seagate Technology (STX) stock fell 7.5% on Monday, dropping from around $795 to roughly $736, after CEO Dave Mosley told investors at the JPMorgan Global Technology, Media and Communications Conference that the company has no plans to build new factories.
Seagate Technology Holdings plc, STX
When asked about expanding manufacturing capacity to meet rising demand for hard disk drives, Mosley was direct: new factories would “take too long” and could leave the company with more capacity than it needs.
“If we took the teams off and started building new factories or bringing up new machines that would just take too long,” Mosley said. “You end up more capacity, if you will, but then you’d slow the rate of growth on that technology.”
Instead, Seagate is doubling down on squeezing more storage out of the same physical footprint — a technology-led approach rather than a volume-led one.
The company is targeting mid-20s percent compound annual growth by advancing through platter density transitions, moving from 3 terabytes per platter to 4 and then 5 terabytes per platter. Mosley said this path offers growth without the overhead of building out new plants.
Supply Constraints Already Biting
Seagate’s supply situation is tight. Recording head wafers — a critical component — already carry lead times exceeding nine months. Drives then take an additional quarter to produce on top of that.
To manage the pipeline, Seagate has moved to a build-to-order model, giving it visibility four to five quarters ahead.
Mosley acknowledged that demand is outpacing current supply, with customers pushing for more exabytes. But he said expanding unit capacity only makes sense if broader use cases like Edge AI take hold, which would require moving beyond the current data center focus.
Seagate’s Mozaic 3 HAMR (Heat-Assisted Magnetic Recording) technology has now been qualified at all planned cloud service providers. The company expects to hit 50% exabyte crossover to HAMR in the second half of calendar 2026.
Valuation and Insider Activity Draw Attention
STX’s P/E ratio currently sits at 69.77x — high relative to its earnings profile. GuruFocus flags the stock as significantly overvalued based on its GF Value model.
The GF Score for STX is 71 out of 100, with profitability and growth both rated at 7/10. Financial strength comes in lower at 6/10.
Insider activity has also drawn attention. Insiders sold $66.4 million worth of stock over the past three months, with no recorded purchases during the same period.
Seagate holds a market cap of approximately $164.89 billion and operates in a practical duopoly with Western Digital in the HDD market.
The stock decline came entirely on the back of Mosley’s conference remarks, with no new earnings or guidance update issued on the day.
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