SEAGATE: THE STEALTH LEADER

Analyst Erik Woodring calls Seagate stock $STX as "too attractive to ignore" - despite the company often being overlooked in the context of fast-growing tech 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

Strengths of Seagate $STX:

Low P/E

Investors still don't appreciate the growth potential

Free cash flow (FCF)

Company 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 size, which is key to data center efficiency.

• Industry cyclicality: HDD and SSD demand fluctuates with IT investment cycles
• Competition: Western Digital's main rival and the growing SSD segment (Samsung, Micron)
• Slow response from retail investors: Seagate is not a "sexy" AI play, so growth may be slower than it deserves

Seagate is an undervalued driver of the data boom that:

• Benefiting from growth demand for storage
• offers a nice price-to-earnings ratio
• has a technological edge in data recording
• generates stable cash flow and dividends

For value and technology-minded investors $STX an interesting combination of defense and growth.