Seagate

Seagate brought in 4.2 billion dollars in its latest quarter, up 61 percent from a year ago. It kept about 57 cents of every sales dollar after paying to make its drives, up from 39 cents last year, and its profit more than tripled to 1.76 billion dollars. It expects about 4.8 billion dollars in sales next quarter, so the momentum is still building.

Seagate produced 1.5 billion dollars of spare cash in a single quarter, the most in its history. It paid off 1.2 billion dollars of debt and then another 750 million dollars right after, cutting what it owes to 1.6 billion dollars. That is less than half of what it owed four months earlier, and it still sent 568 million dollars back to shareholders and raised its dividend about 3 percent to 76 cents a share.

The hard drive business has a long history of feast and famine, and outside of big data centers it keeps losing ground to memory chips. Just a year ago, Seagate kept about 39 cents of every sales dollar after production costs, compared with 57 cents today. If the biggest cloud buyers pause their orders, profits can shrink just as fast as they grew.

Seagate is now valued at roughly 150 billion dollars, so investors already expect the good times to keep rolling. The stock also tends to move about twice as much as the overall market, in both directions. Any hint of slowing demand could knock it down hard.