Seagate Technology Holdings PLC (STX) shares were down 3.54% at $881 in premarket trading Friday, as a wave of selling swept across the semiconductor and tech hardware sector. The broader market was relatively calm — Nasdaq futures were up 0.18% and S&P 500 futures gained 0.27% — but chip stocks took a hit after a rough week for big tech earnings.
The trouble started overnight with steep declines in South Korean chipmakers, including SK Hynix Inc (SKHY), and accelerated after disappointing results from U.S. tech giants earlier in the week. Investors are now trimming positions and pulling profits ahead of Seagate's own fourth-quarter earnings report, due Tuesday.
Strategic Position Trimming
With Seagate's earnings just days away, Wall Street is playing defense. Analysts expect the company to report earnings per share of $5.04 and quarterly revenue of $3.48 billion. But the broader mood has soured on high-flying AI trades after a pair of disappointing updates from mega-cap tech companies on Thursday.
Alphabet Inc. (GOOGL) (GOOG) stunned the market by revealing it bought back zero shares in the first two quarters of 2026, after spending $28.31 billion on buybacks during the same period last year. Instead, Alphabet boosted its 2026 capital expenditures outlook to between $195 billion and $205 billion to support AI infrastructure. That spending binge pushed its second-quarter free cash flow to negative $5.86 billion, and management warned that technical-infrastructure investment would continue to pressure cash flow.
Meanwhile, Tesla Inc. (TSLA) reported second-quarter adjusted earnings per share of just 33 cents, well below the consensus estimate of 50 cents. Revenue came in at $28.23 billion, and deliveries totaled 480,126 vehicles. Tesla stock fell 7.76% to $344.97 on Thursday.
The combination of Alphabet's capital allocation shift — from buybacks to AI spending — and Tesla's earnings miss has prompted caution across the hardware sector. If the biggest names in tech are struggling to generate returns on their AI investments, the thinking goes, what does that mean for companies like Seagate that supply the storage infrastructure?
Technical Analysis
Despite the premarket dip, Seagate's stock remains in a strong longer-term uptrend. It's trading about 28% above its 100-day simple moving average of $695.65 and roughly 78% above its 200-day SMA of $500.62. That keeps the bigger picture tilted bullish. But in the near term, the stock is only modestly above its 20-day SMA ($878.33) and 50-day SMA ($886.61), so there's not much cushion if selling pressure builds.
Momentum is neutral: the Relative Strength Index sits at 52.90, suggesting the move isn't stretched to an overbought or oversold extreme.
- Key Resistance: $937.50
- Key Support: $802
With earnings on deck Tuesday, all eyes will be on Seagate's own AI-related commentary and whether it can buck the sector's gloomy mood. For now, the market is voting with its sell orders.
