Seagate: Agentic AI, video to fuel storage demand spike

Seagate Technologies CEO William Mosley said on the company's second quarter earnings call that capacity for 2026 is already allocated and "and we expect to begin accepting orders for the first half of calendar year 2027 in the coming months." Storage demand has spiked due to AI workloads and data center buildouts. 

The comments underscore how there's going to be a storage supply issue ahead in addition to memory constraints. These hardware constraints are raising prices for everything from smartphones and PCs to servers and storage systems. Everything on-premises is going to be a cost headache. And cloud providers will likely pass on costs too. 

Memory price surge may crimp on-premise AI, data center deployments

Mosley added that agentic AI is also going to juice storage demand. He said:

"Agentic AI relies on persistent access to large volumes of historic data to enable effective planning, reasoning and independent decision-making. Adoption is already gaining momentum with one recent survey conducted by a leading cloud service provider reporting more than half of participating customers were actively using AI agents. Early adopters are already realizing measurable returns with benefits ranging from lower cost to increase revenue opportunities.

With the deployment of AI agents at the edge, where untapped data often resides, we believe the stage is set for a sustained and meaningful increase in data generated and stored that will support inferencing, continuous training and also maintain model integrity."

 

In other words, Seagate is going to benefit from all the hard drives required behind the scenes. Video is also a boon to the storage business as AI agents leverage video and consumers produce slop (only half kidding). 

Mosley continued:

"Video applications continue to drive significant demand for hard drives with platforms like YouTube witnessing 20 million video uploads daily, up from just 2 million 3 years ago. This staggering pace of growth extends to other cloud video platforms and doesn't yet include the full surge in content generation expected from emerging AI-driven video applications.

These applications are not only fueling social media uploads, but they are also transforming how organizations turn their data into tangible value, enabling personalized marketing, interactive education and advanced simulations, capable of training manufacturing, engineering, health care and other professionals. The strategic value of data is further underscored as new applications and use cases emerge across cloud and edge workloads."

 

Mosley said Seagate is discussions about allocating capacity two and three years from now. 

Seagate reported second quarter earnings of $2.60 a share, or $3.11 on an adjusted basis, on revenue of $2.83 billion. The results handily topped expectations. 

As for the outlook, Seagate raised its third quarter guidance to non-GAAP earnings of $3.40 a share, give or take 20 cents a share, on revenue of $2.90 billion, give or take $100 million.