Jim Cramer says it may be time to trim comeback stock after 441% surge
Jim Cramer suggests that investors may want to trim their position in Seagate Technology (STX) after its impressive comeback, citing the need to lock in profits and rebalance their portfolio.
Intelligence analysis by Llama
Jim Cramer advises investors to consider trimming their position in Seagate Technology (STX) after its remarkable comeback, as the stock has already gained 441% and carries elevated expectations heading into earnings.
Imagine you have a stock that has gone up a lot, like Seagate Technology (STX). Jim Cramer is saying that it might be a good time to sell some of it, so you can lock in your profits and not lose too much if the stock goes down.
Analysis
What has driven Seagate's extraordinary comeback
The Seagate story in 2026 is a direct function of what Artificial Intelligence (AI) infrastructure spending requires, at scale. Training and serving large language models generate enormous quantities of data. That data needs somewhere to live, and hard disk drives remain the most cost-efficient mass-capacity storage medium available at hyperscale.
Why Cramer's trim call makes tactical sense at this level
My read of Cramer's comment is that he is applying basic position management logic to a stock that has earned its gains but now carries elevated expectations heading into earnings. That makes a lot of sense. I am also of the same idea because, at the end of the day, you need to pay yourself after a massive rally. Lock in some profits. If we get a retracement to a key level and positive forward guidance after the earnings, then you can also add to your winners for a potential extension of the rally.
What Seagate's July 28 earnings needs to deliver
Management guided fiscal Q4 2026 revenue of $3.45 billion, plus or minus $100 million, with non-GAAP diluted EPS of $5.00, according to the company's guidance. Seagate holds a Zacks Rank #1 (Strong Buy) with an Earnings Surprise Prediction (ESP) of +1.75%, indicating a strong probability for an earnings beat.
Key points
- Seagate Technology (STX) has experienced a remarkable comeback, with a 441% surge in the past year.
- Jim Cramer suggests that investors may want to trim their position in Seagate Technology (STX) after its impressive comeback.
- Seagate's HAMR technology has enabled the company to become a differentiated AI infrastructure supplier.
- The company's Q4 guidance is already known, and investors will be looking for a beat on earnings and positive forward guidance to extend the rally.
If Seagate Technology (STX) delivers strong earnings and positive forward guidance, the stock could continue to rally, making it a good opportunity for investors to add to their positions.
If Seagate Technology (STX) fails to meet earnings expectations or provides weak forward guidance, the stock could experience a significant decline, making it a good time for investors to trim their positions.
