To The Moon

Seagate And SK Hynix Earnings Beat Fuels Sustained Sector Boom

After-hours earnings from Seagate and SK hynix point to continued strength across memory and storage.

$Seagate Technology PLC(STX)$  

Year-to-date, both Western Digital (WDC) and Seagate (STX)—heavily exposed to HDD—rank among the top five performers in the S&P 500, and Seagate's latest results validate that rally.

Seagate (fiscal Q1 FY26, September quarter)

~Revenue $2.63B, +21% y/y (vs. Street $2.55B); non-GAAP net income $583M, +73% y/y; EPS $2.61 (vs. $2.39 expected). However, a slowdown in revenue growth is notable.

~Outlook: Q4 (Q2FY26) revenue guide ~$2.7B (+~16% y/y), slightly above consensus.

~Profitability: Gross margin 40.1% (in line with its revised long-term model); non-GAAP operating margin 29%; Q4 guide ~30%, implying continued upside from pricing and cost reductions.

~Supply discipline and mix shift: Management reiterated plans to restrain unit capacity, targeting ~25% exabyte growth through the transition to higher-capacity drives and a multi-quarter ramp of HAMR (Heat-Assisted Magnetic Recording).

~Customer traction and ramp: Five major cloud customers have qualified Seagate’s HAMR platform, with plans to add three more in coming quarters; HAMR shipments topped 1 million units this quarter. Seagate expects a capacity crossover to HAMR in 2H 2026.

Goldman Sachs believes Seagate remains a key beneficiary of high-capacity storage demand, likely to regain nearline HDD share as HAMR qualifications progress into 2026. With prudent supply-side actions across the industry, they see continued upside driven by healthier supply/demand dynamics.

$SK Hynix, Inc.(HXSCL)$  

SK Hynix, as an industry leader with a comprehensive layout in DRAM and NAND, and holding the largest market share in HBM, has demonstrated even stronger performance.

Following the earnings report, SK Hynix's stock price rose by approximately 5%, and its Year-to-Date (YTD) gain also reached 218%.

The quarterly report shows that Q3 revenue reached 24.45 trillion Korean Won (approximately 17.1 billion USD), a 39% year-on-year increase; operating profit was 11.38 trillion Korean Won (approximately 8 billion USD), surging by 62% year-on-year; and net profit was 12.598 trillion Korean Won. All these figures set new historical highs.

The financial report pointed out that sales of high-value-added products, such as 12-layer stacked HBM3E and server DDR5, were the main contributors to the performance growth. The company's Q3 gross profit margin reached an impressive 57%, demonstrating strong profitability.

Company CFO Kim Woohyun stated in the earnings report that demand across the entire memory sector has surged as customers expand their investments in AI infrastructure.

The company has completed all negotiations with major customers regarding HBM supply for 2026 and plans to begin shipping next-generation HBM4 products in Q4 2025, with full-scale sales commencing in 2026.

SK Hynix expects DRAM bit demand to grow by over 20% year-on-year in 2026 and forecasts that the tight HBM supply will continue until 2027. NAND bit demand is projected to see double-digit year-on-year growth. Capital expenditure in 2026 will be higher than in 2025.

With several major players having now released their latest quarterly reports, both quantitative and qualitative trends suggest a high probability that the sector's robust performance will continue into 2026. Notably, DRAM's supply-demand dynamics are expected to remain more favorable than NAND's.

I will continue to monitor the business conditions in the HDD & NAND sectors, with specific observations on Western Digital tomorrow and SanDisk next week.

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