Seagate Technology Holdings
on Tuesday increased its financial guidance for the corporate’s fiscal fourth quarter ended July 2, pushed by robust demand from enterprise prospects — and apparently from accelerating gross sales tied to a brand new cryptocurrency referred to as Chia.
For the quarter, Seagate (ticker: STX) now sees income of $2.95 billion, give or take $150 million, up from a earlier forecast of $2.85 billion, with non-GAAP earnings of $1.85 a share, give or take 15 cents, up from $1.60.
“Strong, broad-based demand for our merchandise into the mass capability markets and distribution channel is driving upside to our fourth quarter outlook,” Seagate CEO
mentioned in a press release. “We are excited by the constructive momentum we’re seeing globally and leveraging the agility of our manufacturing operations to handle the quickly altering demand atmosphere.” The replace comes forward of a presentation this morning by Seagate CFO Gianluca Romano on the Bank of America 2021 Global Technology Conference.
Once extremely reliant on the non-public laptop market, Seagate’s focus has shifted to high-capacity drives utilized in knowledge facilities and the general public cloud. Moseley’s reference to power in demand from the “distribution channel” doubtless displays the surge in demand for drives used to “farm” a brand new cryptocurrency referred to as Chia.
Chia makes use of a unique mannequin than different cryptocurrencies to create new cash. (Chia calls the method “farming,” moderately than “mining.”) Most cryptocurrencies rely on a “proof of labor” mannequin to confirm transactions: Miners resolve complicated mathematical issues that require a lot of computational energy to earn cash, which explains why conventional crypto mining is so vitality intensive. Chia’s strategy to creating new cash is tied to storage capability dedicated to the blockchain, moderately than computational would possibly.
Last month, shares of each Seagate and rival
rallied after Morgan Stanley analyst Joseph Moore famous that a large enhance in demand for prime capability disk-drives from Chia farmers was driving up costs and creating shortages. As Moore wrote in a analysis word, “the profit is that energy consumption is way decrease, for the reason that calculations are a lot decrease and fewer demanding than proof of labor.” What Chia does require is huge disk-drive capability.
Reports in regards to the influence Chia has been having on the disk-drive market have been circulating for weeks. Western Digital CEO
mentioned in April that his firm was seeing a pickup in demand for high-capacity disk drives from Chia producers.
Barron’s additionally talked about the influence Chia is having on drive demand in a bullish characteristic final month on Seagate shares.
Seagate shares on Tuesday morning have been up 0.4%, to $99.04. The inventory is up about 18% for the reason that Chia-driven rally began in mid-May. Western Digital shares have been down 0.5%, to $75.78.
Write to Eric J. Savitz at [email protected]