Seagate Still Holding Strong

John is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Seagate Technology PLC (NASDAQ: STX) has been doing quite well for itself lately, and given the current state of the computer hardware market that's quite an accomplishment. With the demand for hard drives shifting more and more to solid state drives and consumers hoping for increased read/write speeds, even companies who seemed desitined to enjoy market dominance have to fight for their market share just like everybody else.

Take STEC (NASDAQ: STEC) for example. The company was a major player in the solid-state revolution, and seemed poised to all but rule the market for solid state drives. Once larger hard drive manufacturers started catching up to STEC in regard to SSD technology, however, the company's market share started to crumble. The company's recent Q1 report showed a revenue loss that was even larger than previously expected, and projections for Q2 don't look much better.

Seagate, on the other hand, has doubled its stock prices since December and along with Western Digital (NASDAQ: WDC) is enjoying an increased market share in regard to solid state drive sales. Both Seagate and Western Digital enjoyed strong Q1 growth, though some industry watchers worry what the coming quarter will hold. Some of these fears may be put to rest at the SCSI Trade Association Technology Showcase this week, however.

The buzz surrounding Pulsar.2, Seagate's new solid state drive, is optimistic; the drives will produce data transfer speeds of up to 12 gigabytes per second, which is roughly twice the speed of current drives. Though the new drive technology isn't expected to be available commercially until 2013, the potential that it demonstrates at the Technology Showcase will help to build interest in the new drives and hopefully will result in a strong product launch when they do hit the market.

If the reception of the Pulsar.2 technology is as positive as the early hype suggests, this could be a good time to get on board with Seagate. Stock prices jumped several dollars in February and have been climbing ever since, with shares passing through a range that the company hasn't enjoyed in years. If Seagate can keep pricing and manufacturing costs under control through the rest of the year then prices could continue to rise slowly but surely right through to the Pulsar.2 release.


Croaxleigh has no positions in the stocks mentioned above. The Motley Fool owns shares of Western Digital. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.

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