Seagate's HDDs Face AI Headwinds, But Not From Alphabet's New Algorithms

2026-03-31 11:48:16 ET

Thesis

Seagate ( STX ) has had a great run since I recommended the stock back in early October. I still think that STX is a great company and overall in a good position, especially with its emphasis on HDD storage, which should continue to enjoy high demand amid the AI boom. However, I do believe the AI-boom will cool a bit through the near term. I’m not in the AI bubble camp, to be clear, and believe that AI will continue to prove disruptive as a technology. That said, investor skepticism over massive AI CapEx spending, along with surging energy prices could result in a short to medium term cooldown. I also suspect we’ll see governments pressuring tech companies to cool energy consumption for now, owing to the conflict in the Middle East and the closure of the Strait of Hormuz....

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