Lee James CI sold $3.3M of STX

Seagate Technology and Western Digital, which together control 90% of the hard disk market, are in a bidding war for TDK's drive head business, according to Bloomberg. Toshiba, the third-largest player, relies on TDK for this critical component. Seagate's acquisition could potentially eliminate Toshiba from the market. Western Digital recently announced new technologies to improve drive throughput.

Seagate (STX) and Western Digital (WDC) shares fell 9% and 7% respectively after a Bloomberg report suggested they are competing to acquire TDK’s magnetic heads business. Both companies have denied finalizing any deal. Bernstein SocGen defended the stocks, citing overstated concerns. Moody’s upgraded Seagate’s rating, expecting 30% revenue growth. STX is up 194% year-to-date but down 15% weekly.

Stock futures are down due to rising Treasury yields and oil prices, which surged on reports of potential U.S. strikes in Iran. Samsung's preliminary results missed estimates, causing memory stocks to fall. PepsiCo (PEP) beat earnings but cut profit forecasts, while Applied Digital (APLD) saw revenue surge, boosting its shares.

Seagate and Toshiba are reportedly competing to acquire TDK's HDD magnetic head business, valued at several billion dollars. TDK is the sole independent supplier of these critical components, with Toshiba entirely dependent on it. Seagate also produces heads internally but would gain additional supply. The deal could alter the HDD industry's competitive balance and faces regulatory scrutiny.

Seagate Technology and Toshiba are reportedly competing to acquire TDK's hard-disk-drive magnetic-head business, which is crucial for AI data-center storage.

Seagate (STX) shares fell 9.5% due to concerns over a multibillion-dollar acquisition contest with Toshiba, potential balance sheet strain, and high valuation. Toshiba's planned 2027 capacity ramp and insider selling also contributed. STX is up 180% YTD but 26.4% below its 52-week high.