Seagate Technology PLC (STX) saw its stock surge 5.63% in pre-market trading on Wednesday, following the company's impressive fiscal second quarter 2025 earnings release. The data storage solutions provider reported better-than-expected results, driven by robust demand for its high-capacity mass storage products from cloud computing and artificial intelligence (AI) customers.

For the quarter ended December 2024, Seagate delivered revenue of $2.33 billion, up 7% sequentially and beating analyst estimates. The company swung to a non-GAAP profit of $2.03 per share, exceeding consensus expectations of $1.88. Seagate's strong performance was fueled by growing adoption of its latest generation nearline drives, including the HAMR-based Mozaic platform.

During the earnings call, Seagate's management highlighted the significant growth in the cloud sector, with nearline product revenue nearly doubling year-over-year. The company's areal density-driven roadmap, led by HAMR technology, positions Seagate well to offer compelling storage solutions and drive significant profitable revenue growth in fiscal 2025 and beyond.

Analysts reacted positively to Seagate's results, with Citi raising its price target on the stock to $125 from $120, maintaining a Buy rating. The firm cited Seagate's better-than-expected results and the company's ability to capture value in an improving demand environment driven by the AI revolution's insatiable appetite for data storage.

Looking ahead, Seagate provided an optimistic outlook for the fiscal third quarter 2025, forecasting non-GAAP earnings per share between $1.50 and $1.90, along with revenue guidance of $2.10 billion, plus or minus $150 million. The company's focus on advancing its technology roadmap and capitalizing on the surging demand for mass data storage driven by AI and machine learning applications is expected to fuel its growth momentum.