Seagate forecasts second-quarter results above estimates on AI strength

(Reuters) -Seagate Technology forecast second-quarter revenue and profit above analysts' estimates on Tuesday, betting on robust demand for its storage devices as cloud providers expand investments in hardware to support generative AI development.  Shares of the company rose over 3% in extended trading.  Cloud providers are pouring hundreds of billions of dollars into hardware that aids in the data-intensive process of training and running GenAI applications. Seagate, which supplies disk drives used to store vast amounts of data, has benefited from this.  Seagate expects second-quarter revenue of $2.70 billion, plus or minus $100 million, compared with analysts' average estimate of $2.66 billion, according to data compiled by LSEG. It expects adjusted profit of about $2.75 per share in the current quarter, above estimates of profit of $2.62 apiece. Boosted shipments of its products are being driven by "demand for existing use cases such as social media video platforms as well as growth driven by new AI applications," CEO Dave Mosley said in a statement. The optimistic forecast represents further normalization in memory device inventory levels, after a supply glut over the last two years drove cloud providers to cut back on orders in a bid to clear existing inventory. The addition of AI features to personal electronics has boosted the memory requirements of such devices. This will help Seagate, whose hard disk drives and other storage devices are employed in personal electronics.  Seagate reported revenue of $2.63 billion for the first quarter ended October 3, compared with the consensus estimate of $2.55 billion. The company posted adjusted earnings of $2.61 per share versus analysts' expectations of profit of $2.37 apiece. (Reporting by Arsheeya Bajwa; Editing by Alan Barona)

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