Analyst Erik Woodring called Seagate stock "too attractive to ignore" - despite the company often being overlooked in the context of fast-growing technology titles (AI, cloud, cybersecurity). Reasons:

  • Valuation: shares of $STX trade at just 7.5 times forward EPS, which is low even in the context of value tech companies
  • Demand for storage will grow with the rise of AI, edge computing, cloud and IoT
  • Strong position in data centers - market expects dramatic growth in the amount of data that needs to be stored and managed

Low P/E

Investors still don't appreciate the growth potential

Free cash flow (FCF)

Company $STX Regularly generates strong cash flow

Technological leadership

Advanced HDD/SSD technologies including heat-assisted magnetic recording (HAMR)

Partnerships

Key position in hyperscalers (AWS, Azure, Google Cloud)

Seagate $STX is a major supplier of disk storage for data centers, which are experiencing a boom due to:

  • Exponential growth of AI training models (which generate massive data volumes)
  • Cloud migration of companies around the world
  • Data backup, redundancy and security

Additionally, HAMR technology allows for dramatically increased disk capacity without increasing physical footprint, which is key to data center efficiency.

Seagate is the underrated workhorse of the data boom that:

  • capitalizes on the growing demand for storage
  • offers a nice price-to-earnings ratio
  • has a technological edge in data recording
  • generates stable cash flow and dividends

I wouldn't buy for the recommendation, but I'm interested in stocks like this, so thanks for the tip👍.

I like the low valuation and the P/E. Of course, it depends on what kind of customers they have and what the demand will be.

It looks attractive and if this stock is not yet under the radar of investors, this could be a great time to buy.

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