Seagate Technology Holdings PLC (NASDAQ:STX) shares are trading lower Tuesday after the company’s CEO recently raised concerns about the company’s capacity to meet rising demand for memory chips due to AI expansion. This has also caused peers within the sector to pull back.
- Seagate stock is under selling pressure. Why is STX stock retreating?
Seagate CEO Warns Of Capacity Constraints
During a JPMorgan conference on Monday, CEO Dave Mosley discussed challenges tied to expanding production capacity at Seagate's factories.
"If we took the teams off and started building new factories or bringing up new machines, that would just take too long. You would end up with more capacity, but then you'd slow the rate of growth on that technology," Mosley said, according to CNBC.
Mosley also pointed to "very long lead times" and said the company is working to maintain predictability with customers by providing visibility into products planned for release next year.
"We want to keep that four or five quarters of visibility very, very solid for what's being built. But the demand is significantly higher than that," he said.
Some peers that declined following this news include Western Digital Corporation (NASDAQ:WDC) and Sandisk Corporation (NASDAQ:SNDK)
Memory Stocks Pull Back
Price Action: At the time of publication, Seagate shares are trading 5.26% lower at $701.86, Western Digital shares are trading 4.50% lower at $438.05, and Sandisk shares are trading 2.49% lower at $1,299.78, according to data from Benzinga Pro.
Image via Shutterstock
Login to comment