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Seagate Upgraded to BB+ by S&P
October 16, 2025
Seagate Technologies along with its senior notes was upgraded by a notch to BB+ from BB. The upgrade comes on the back of strong performance recovery, improved leverage, and record profitability amid a broad HDD market rebound. In the latest quarter, Seagate’s revenue rose 30% YoY to $2.4bn, with a gross margin of 37.9%, its highest ever. The company expects next-quarter revenue of $2.5bn (up 15% YoY) and aims to achieve a 40% gross margin soon, supported by growing demand for high-capacity drives from hyperscale data centers, AI-related workloads, and edge applications. S&P highlighted Seagate’s strong position in mass capacity storage, with 9% CAGR in that segment since 2017, and technological leadership through HAMR (heat-assisted magnetic recording), which should preserve its cost advantage over NAND. According to S&P, key risks include inventory cycles of major cloud customers, potential shifts in tariff exemptions, and past debt-funded share buybacks, which constrain further upgrades. S&P said future rating improvement would depend on sustained deleveraging and disciplined financial policy.
Its dollar bonds traded stable with its 5.75% 2034s at 99.5, yielding 5.82%.
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