Seagate makes hard drives, which store most data centre data at lower cost.
Analysis
The stock fell after Toshiba announced plans to double its production capacity. The prospect of greater supply raises fears of price pressure. A structural growth story can turn into a margin story when capacity expands.
Opportunity
The opportunity remains the growth in data volumes generated by AI. The risk is a price war in a market with few players.
Investor outlook
Negative to neutral outlook. Industry wide capacity discipline must be verified before the thesis is reassessed.
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