Seagate Technology PLC (STX) shares plummeted 9.05% in pre-market trading on Wednesday, following the release of its fourth-quarter earnings report and first-quarter guidance. Despite beating expectations for Q4, the company's weak outlook for Q1 2026 has rattled investors, reflecting ongoing challenges in the data storage market.

The data storage giant reported impressive Q4 results, with adjusted earnings per share of $2.59, surpassing the analyst consensus of $2.45. Revenue for the quarter came in at $2.44 billion, slightly above the estimated $2.43 billion. These figures marked a significant improvement from the same period last year, with earnings more than doubling and revenue increasing by 29.5%.

However, Seagate's forecast for the first quarter of fiscal 2026 fell short of Wall Street expectations, triggering the sharp sell-off. The company projects Q1 adjusted EPS of $2.30 (plus or minus $0.20) on revenue of $2.50 billion (plus or minus $150 million), below analysts' projections of $2.36 EPS on revenue of $2.53 billion. Seagate cited weak demand for its storage devices amid ongoing uncertainty in the personal computer market as a key factor influencing its conservative outlook, despite optimism surrounding on-device AI features and an anticipated Windows 11 refresh cycle.