• Mosley noted that the only way the company will achieve its high-growth-rate target is through technology transitions.
• In an interview earlier this month, the CEO said the company would rather focus on improving its technology that expand production capacity.
• Evercore said last week Seagate's business is underpinned by efficient supply management, technological advancements, and a "robust" demand backdrop.

Shares of Seagate Technology (STX) drew significant investor buzz on Monday after CEO Dave Mosley provided commentary on the company’s manufacturing at a JPMorgan conference.

At the time of writing, STX stock was down nearly 7%.

Mosley’s Commentary

At the event, when Mosley was asked about plans to expand manufacturing capacity to meet AI-related demand, he said building new factories would take too long and could create a surplus for the company.

"We're targeting mid-20s% growth, which is enormous CAGR, the only way we're gonna get there is to be able to go through those technology transitions... That's really the way we're driving it. If we took the teams off and started building new factories or bringing up new machines, it would just take too long,” he stated, according to TheFly.

The remarks come amid the aggressive U.S. data center boom to power artificial intelligence, which has led to a surge in prices for energy, chips, memory, and related components.

Seagate Aims To Advance Technology

In an interview with Bloomberg earlier this month, Mosley said the company’s game plan is to advance its technology to boost capacity and productivity rather than spend on expanding manufacturing.

“The way for us to get to much bigger exabyte production is to jump through these technology trends, not to stop and say, ‘Okay, I’ll build another factory,’ because that’s a long lead time,” Mosley had then said.

The company’s focus is on “making our entire manufacturing operations much more efficient, getting more exabytes out,” Mosley said. “And then we’re showing that to customers, and they’re saying, ‘I’ll take it.’”

Last week, Evercore praised Seagate, saying that its business is underpinned by efficient supply management, technological advancements, and a "robust" demand backdrop, per TheFly. They also highlighted that STX's long-term growth outlook "appears strong," as they hiked the price target to $1,000 from $750 and maintained their ‘Outperform’ rating.

What Retail Thinks About STX

On Stocktwits, retail sentiment about STX turned ‘bearish' from ‘neutral’ over the last 24 hours.

However, Wall Street is largely bullish, with 20 out of 24 analysts covering the stock rating it a ‘Buy’ or higher; three rate it a ‘Hold,’ and one ‘Sell.’

STX stock has nearly tripled in value so far this year, and risen more than sevenfold over the past 12 months, outperforming the S&P 500, the VanEck Semiconductor ETF (SMH), and the iShares Semiconductor ETF (SOXX).

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