4. Seagate Technology Holdings plc (NASDAQ:STX)
Market capitalization: $139.43 billion
Forward P/E: 9.23
Expected forward revenue growth: 46.16%
Number of hedge fund holders: 131
Hard Drives Make a Very Profitable Comeback
Seagate Technology Holdings plc (NASDAQ: STX) is giving investors a reason to reconsider a technology that rarely wins the glamour contest. Fiscal first-quarter 2027 revenue reached approximately $4.2 billion, up 61% year over year, while the adjusted operating margin climbed to 50.7%. Adjusted earnings totaled $7.68 per share, and free cash flow approached $1.5 billion. In its late-October results, chief executive Dave Mosley described “another quarter of record profitability and our highest ever free cash flow.” The appeal is straightforward: demand for mass-capacity storage can grow alongside AI without requiring the storage supplier to build the model that becomes everyone’s favorite chatbot. The customer still needs somewhere economical to retain the resulting data.
The next stage of the business rests partly on the Mozaic platform and HAMR technology, which increase storage capacity through higher recording density. Management attributed margin expansion to pricing and a more favorable product mix as Mozaic 4 shipments increased. It also maintained a fiscal 2027 capital-expenditure target of 4% to 6% of revenue, a useful measure of how much spending is required to support the transition. On the balance sheet, the company retired $1.2 billion of debt during the quarter and another $750 million after quarter-end. Our interpretation is that this combination deserves attention: improving products can support profitability, while lower debt can leave more of the resulting cash available for shareholders.
Shareholder returns are consequently becoming a larger part of the story. The company returned $568 million through dividends and repurchases during the quarter and increased its quarterly dividend approximately 3% to $0.76 per share. Management also said repurchases should increase significantly in calendar 2027 after the debt-reduction program. At the supplied forward P/E of 9.23, investors are weighing whether strong cash generation can continue as customers adopt higher-capacity products. That is a more useful framework than assuming an established technology must be a declining business. The remaining test is whether storage demand, pricing discipline, and execution stay aligned. A comeback becomes more convincing when it funds both product development and distributions to shareholders.
Ranking rationale: Seagate Technology Holdings plc (NASDAQ: STX) ranks fourth with 131 hedge fund holders. Its supplied 46.16% expected revenue growth and single-digit forward earnings multiple meet the screen. Strong free cash flow, debt reduction, and the product transition provide the business context, rather than changing its ownership-based position.
