DRAM spot prices have fallen 20% since March, hitting Seagate's memory segment. But the exposure is smaller than the market assumes. Earnings in late July will decide the next move.
Seagate Technology Holdings (STX) has dropped roughly 15% from its 52-week high, and the sell-off has a specific catalyst: falling DRAM prices. The spot price for 8Gb DDR4 chips has declined about 20% since March, according to TrendForce data. That weakness hit Seagate's memory segment, which includes NAND flash and memory products tied to enterprise SSDs and nearline HDDs for data centers.
The market is pricing in a worst-case scenario where a prolonged DRAM glut eats into margins across the board. That reading is too blunt. The DRAM weakness is concentrated in legacy DDR4, not the newer DDR5 or high-bandwidth memory (HBM) that powers AI servers. Seagate's memory business is more exposed to enterprise storage demand, where growth is still intact. The company's fiscal third-quarter results, due in late July, will show whether the DRAM drag is enough to offset that growth.
The better read is that the sell-off looks overdone relative to the actual exposure. Memory products account for roughly 15% of Seagate's revenue. The rest comes from HDDs, where demand from data-center operators remains solid. The bigger risk is not DRAM pricing but a slowdown in enterprise IT spending that hits HDD orders. That is a macro call, not a memory-cycle call.
What would confirm the thesis? If Seagate's July quarter shows memory revenue holding up better than the spot price suggests, the stock could bounce. If the company guides down on HDD demand, the sell-off has further to run. The analyst who wrote the original article holds a long position in STX, along with MU and SNDK, and has been early on several AI-related names.
Seagate's Alpha Score is 66 out of 100, a Moderate rating from AlphaScala's proprietary model. That puts it in the middle of the pack – not a screaming buy, not a clear sell. The score reflects the tension between a cheap valuation (forward P/E around 12) and the cyclical risk in memory pricing.
The next concrete marker is the earnings call in late July. Until then, the stock is a show-me story. The bargain bin might be a trap, or it might be a gift. The data will decide.
For more on Seagate, see the STX stock page.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.