Jim Cramer says Seagate is the ‘key to this market’ after blowout earnings
Tech
CNBC’s Jim Cramer said investors should look to Seagate Technology as a barometer of whether the AI infrastructure trade has any chance of regaining momentum on Wednesday. “What’s the key to this market? It’s Seagate,” Cramer said on ” Squawk on the Street ,” shortly before the opening bell on Wall Street. He described Tuesday night’s earnings from the storage provider as a “picture-perfect quarter.” Accordingly, in after-hours trading, shares of Seagate shot sharply higher after a three-session, 18% slide. The stock held on to strong gains in the morning premarket. “If this company can withstand the gain it had last night, then you’re going to see people say, ‘You know, I’m not as worried as I am after thinking of [ SK Hynix ],'” Cramer said, adding that “orders were amazing, and the forecast was fabulous.” Unlike memory maker SK Hynix’s confusing quarter and commentary, Cramer said the Seagate results stand out because they demonstrate that demand for AI-related storage remains robust despite growing skepticism surrounding the sector. If investors continue to reward the stock after such a strong quarter, he said, it could signal that the recent sell-off in AI infrastructure names has run its course. STX YTD mountain Seagate Technology YTD That won’t be an easy test to pass. After the kinds of parabolic moves that Seagate and other shortage and memory companies have had this year, investors who missed the chance to sell near the top often use any rebound as an opportunity to exit. That dynamic, he suggested, could make it difficult for Seagate to sustain its post-earnings rally. Not long after the open, however, Seagate stock tested Tuesday’s close. It was still up 2% in late morning trading, while the tech-heavy Nasdaq dropped more than 1%. A rally is a rally, though, especially in a down market. It followed a difficult stretch for shares of Seagate. While still up 175% year to date, Seagate is down more than 30% from its all-time intraday high of $1,145 on June 18, which was only about six weeks ago.
Jim Cramer says Seagate is the ‘key to this market’ after blowout earnings
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