Key Takeaways

• Seagate’s rosy revenue outlook for its next quarter is buoying other pick-and-shovel AI plays, extending their recent rally.

• More insight into what’s next for AI demand is expected later today, when four tech giants are set to report their latest results.

The AI crowd is getting fired up, and the headliners haven’t even hit the stage yet.

Investors on Wednesday sent pick-and-shovel AI plays soaring hours before the Big Tech Earningspalooza—with results from Alphabet (GOOGL), Amazon (AMZN), Meta (META) and Microsoft (MSFT)—is set to start. Shares of hard drive maker Seagate Technology (STX) surged after the company raised its outlook on AI-driven demand for its June-end quarter, lifting other companies in the category including Sandisk (SDK) and Western Digital (WDC). All three stocks extended their rallies, landing among the day’s top S&P 500 gainers.

WHY THIS MATTERS TO YOU

Investors are bidding up data storage stocks in anticipation of higher demand, details of which could emerge when big tech reports later today.

Renewed appetites for the AI boom is on full display. Seagate and other data storage stocks have risen many times over, some as much as 3,000%, in the past year, and their stocks could continue rallying as tech giants report earnings and detail how much they stand to spend on developing their AI capabilities, giving more insight into revenue upside for the companies providing the hardware.

Seagate guided investors toward current-quarter revenue in the range of $3.45 billion, give or take $100 million, representing a roughly 40% year-over-year rise at the midpoint, compared to consensus estimates for $3.13 billion, per analysts tracked by Visible Alpha. The company also forecast adjusted earnings per share of $5, plus or minus 20 cents, which was also above analyst expectations.

“AI is reshaping data into a strategic asset,” Seagate chief financial officer Gianluca Romano said during the company’s earnings call Tuesday evening, according to a transcript provided by AlphaSense.

Sandisk and Western Digital are due to report after the market’s close on Thursday

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