Seagate Technology PlcSTX recently announced that IronWolf, IronWolf Pro and Barracuda Pro - which are part of the Guardian Series of hard disk drives (HDDs) - are now available in capacity of up to 12 terabyte (TB).
The 3.5 inch Barracuda Pro HDD is suitable for high performance desktop, creative pro desktop applications and gaming. The high-speed drive enables faster large file transfers and photo editing.
On the other hand, IronWolf and IronWolf Pro are suitable for Network Attached Storage (NAS). The new 12TB drive also support Seagate's IronWolf Health Management (IHM) software, which helps in improving the overall system reliability by displaying actionable prevention, intervention or recovery options for the user.
Capacity Expansion to Boost Demand
Seagate believes that the expanded capacity will improve demand for the HDDs among large enterprises, small and medium size businesses (SMBs) and creative professionals. The HDDs are capable to address the growing storage needs amid huge influx of data generated by emerging technology and services like augmented and virtual reality (AR/VR), 4K resolution and 360-degree videos.
Seagate Technology PLC Price and Consensus
Market research firm IDC forecasts that by 2025, the global datasphere will grow to 163 zettabytes (trillion gigabytes), which is ten times the 16.1 zettabytes (ZB) of data generated in 2016. More importantly, almost 20% of this will be critical to daily lives and nearly 10% of that will be hypercritical.
This massive volume of data presents significant growth opportunity for enterprises. However, effective storage is absolutely necessary to properly harness this data. This presents significant growth opportunity for Seagate in the long term.
Expanding Portfolio to Boost Results
Seagate has been losing HDD market share amid significant competition from Western Digital Corp. WDC . Despite a number of acquisitions, the company also doesn't have significant presence in the flash memory market.
Nevertheless, we expect Seagate's expanding portfolio to be a game changer in the future. At the 2017 Flash Memory Summit (FMS), the company announced enhanced versions of two flash technologies to boost performance and capacity for mixed data center workloads.
Although ramping of its 10 terabyte (TB) helium (nearline) drives have been disappointing, Seagate now expects to ship approximately 1 million 10 TB units in the current quarter.
We also expect Seagate's involvement in the Bain Capital-Toshiba deal will improve its presence in the rapidly growing flash storage market.
Moreover, collaborations with the likes of Tencent and Baidu BIDU is expected to boost Seagate's foothold in China.
Zacks Rank & Key Pick
Seagate has a Zacks Rank #3 (Hold). Netlist Inc NLST with a Zacks Rank #2 (Buy) is a stock worth considering in the same sector. You can see the complete list of today's Zacks #1 Rank stocks here .
Long-term earnings growth for Netlist is currently pegged at 17.50%.
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