Seagate Shares Slide 7% on AI Capacity Warning, Q3 Revenue Up 44%
Seagate shares fell nearly 7% after its CEO warned that expanding manufacturing capacity for AI-driven memory demand will take too long, dragging sector peers lower. The company’s Q3 FY26 revenue rose 44% year-over-year with record $953 million free cash flow, and Stanley Druckenmiller added a fresh stake.
1. Capacity Warning Pressures Seagate Shares
Seagate’s stock dropped nearly 7% after CEO remarks highlighted that scaling manufacturing capacity for surging AI memory requirements would take too long, stoking investor concerns about potential supply bottlenecks and impacting other memory and storage peers.
2. Q3 FY26 Financial and Technology Advances
In Q3 FY26, Seagate reported a 44% year-over-year revenue increase and generated a record $953 million in free cash flow. The company’s HAMR Mozaic technology is boosting drive densities and margins, while long-term contracts have secured nearline capacity through 2027, enhancing revenue visibility.
3. Stanley Druckenmiller Boosts Seagate Stake
Billionaire Stanley Druckenmiller exited his Alphabet position in Q1 2026 and reallocated capital into Seagate, viewing the stock as undervalued amid accelerating AI data center infrastructure demand and robust memory storage trends.