As evidence that the data center boom is boosting many stocks, Seagate Technology (STX) on Tuesday announced that its latest quarterly revenues rose 44% to $3.11 billion compared to $2.16 billion in the same quarter a year ago. The analyst community was expecting revenue of $2.93 billion and operating earnings of $2.83 per share, so Seagate Technology posted a 5.7% revenue surprise and a 17.2% earnings surprise. I should also add that the company raised its quarterly guidance above the analyst consensus estimate, which got investors very excited.
I do not expect the data center boom to slow down since there are simply too many states welcoming the data center boom. Data centers tend to go where there is fast internet, cheaper electricity and cold climates to vent heat at night, so Georgia, Idaho, Kansas, Louisiana, Michigan, Nevada, North Carolina, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, and Virginia are all big winners from the data center boom.
I suspect that spring weather positively impacted March housing starts. The Commerce Department on Wednesday announced that new housing starts surged 10.8% in March to a 1.8 million annual pace. This is the highest level in the past year and is indicative that the drag that residential investment has been having on GDP growth may soon be over. Single-family home starts rose 9.7% in March to a 1.03 million annual pace. Interestingly, building permits declined in March to an annualized pace of 1.37 million, which is the lowest level since August.
The other positive economic news was that the Commerce Department on Wednesday announced that rose 0.8% in March. The best news was that core capital goods surged 3.3% in March and were revised up to a 1.6% increase in February. Core capital goods are now improving at the fastest pace since 2020, so the first quarter report may be stronger than many economists expected.