The Next AI Infrastructure Winner Isn't a Memory Stock. It's This.
2026-10-24 07:30
•Jake Lerch •The Motley Fool
•••••• •• Axe Cap view
Seagate: The Unsung AI Data Centre Essential
Seagate’s HAMR drives power AI growth, but local investors should watch valuation and supply risks closely.
AI’s hunger for data isn’t just about faster chips; it’s about where all that info gets stored. Seagate, with its innovative HAMR hard drives designed for bulk storage, is seeing revenue surge nearly 50% and operating margins climb to 34.6%. That’s impressive given the pressure on hardware suppliers. While SA tech investors often fixate on memory makers like Micron, Seagate's niche in massive data storage deserves attention, especially as AI data centres scale globally. For the JSE, this aligns with the broader theme of tech infrastructure, even if there's no direct local listed equivalent. Keep an eye on the rand — a weaker USD/ZAR could boost imported tech gear costs and squeeze margins. But beware the hype: after doubling in a year, Seagate’s valuation seems full, and supply chain hiccups could delay orders. If AI adoption slows or storage tech shifts, the story can quickly change. this is just our opinion and not financial advice
Keep Seagate strictly on the watchlist for now; trim positions if valuations extend further. For South African investors, monitoring USD/ZAR is key before considering tech exposure linked to global AI infrastructure.
- STX
- USD/ZAR
- Supply chain delays hitting delivery schedules
- High valuation leaving little room for error
6/10
As AI data centers expand, Seagate Technology is positioned as a critical infrastructure provider for bulk storage needs. The company reported 48% revenue growth to $3.63 billion and achieved record operating margins of 34.6%, driven by demand for its HAMR hard drive technology. While the stock has surged over 200% in the past year, investors should consider risks including high expectations, potential order delays, and supply chain challenges.
Our take is based on reporting first published by The Motley Fool.