Polen Capital Management, LLC on Seagate Technology Holdings plc
Thesis
Polen established a position in Seagate, one of just two major hard disk drive suppliers. Data creation from cloud workloads, AI training, video, telemetry and archival storage should sustain demand. Hard disk drives remain economical at data-center-scale capacities relative to solid-state alternatives. With industry supply constrained and customers entering longer-term commitments, Polen sees better volume visibility, pricing power and operating leverage.
“an attractive combination of volume visibility, pricing power, and operating leverage”
Key risks
- Cyclical hyperscaler capital expenditure
- Potential competitive pricing pressure from NAND flash
- A slowdown in cloud and AI storage demand