Moody’s Ratings upgraded Seagate Data Storage Technology’s corporate family rating to Ba1 from Ba2 and its senior unsecured rating to Ba2 from Ba3, while changing the outlook to stable from positive. The ratings agency cited strengthening revenue and profitability prospects tied to artificial intelligence infrastructure investments, which are boosting demand for high-capacity hard disk drives (HDDs).
Seagate operates under a build-to-order model with nearline HDD exabyte capacity allocated to customers through calendar year 2027. The company remains one of two principal suppliers of HDDs, the dominant cost-effective storage solution for the hyperscale cloud segment. Moody’s noted risks including revenue concentration in HDDs, substitution threats from flash memory in legacy markets, potential pricing pressure, and growing reliance on hyperscale cloud customers.
The upgrade reflects expectations of a more than 30% annual revenue increase over the next 12 to 18 months, pushing toward $20 billion as end-market demand recovers. Financial leverage is projected to decline to below 0.5x debt-to-EBITDA within the same period, down from 0.9x for the twelve months ended July 3, 2026. Free cash flow is expected to exceed $4 billion annually over the next 12 to 18 months, supported by Seagate’s $1.7 billion in cash balances as of July 3, 2026. The company maintains full access to a $1.3 billion revolving credit facility maturing in January 2030 and is expected to remain compliant with financial maintenance covenants.
