Seagate Technology Holdings (STX) Could Be 22% Undervalued As Buybacks Come Into View

September 25, 2026 - 18:56

Seagate Technology Holdings has wrapped up a long effort to clean up its balance sheet by paying off the last of its 3.50% exchangeable notes due 2028. With that debt gone, the storage maker has signaled it will ramp up share repurchases in a meaningful way beginning in 2027.

The news comes as investor interest in Seagate's role in AI and hyperscale cloud storage has pushed the stock sharply higher. Shares have climbed 12.8% over the past seven days and are up 215.1% so far this year. That kind of run has raised questions about whether the rally has gotten ahead of the fundamentals, but the company's improving financial position gives it more room to return capital.

Buybacks can support per share earnings and signal confidence from management. For a hardware business tied to cyclical demand, that flexibility matters. Analysts who track the stock see room for the shares to trade higher if repurchases pick up and cloud spending stays firm. Some estimates put the gap between the current price and fair value at around 22%, though that view depends on how the AI storage boom unfolds.

For now, Seagate appears to have cleared a key hurdle and is setting the stage for a more shareholder friendly stance in the years ahead.