Seagate Western Digital and Sandisk Positioned for AI Wins

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Which Storage Stock Is Best Positioned to Win the AI Memory War?

Written by Nathan Reiff on July 16, 2026 

Rows of server racks with blue network cables and storage drives in a data center aisle.

Key Points

  • Seagate, Western Digital, and Sandisk have each posted strong revenue growth and rising margins amid memory industry volatility and surging AI demand.
  • Shares of all three companies have rallied dramatically year to date, with analysts maintaining mostly Buy ratings and additional upside targets despite recent price swings.
  • Rising competition, including China’s ChangXin Memory Technologies’ pending IPO, could reshape the memory storage landscape even as demand for HDDs and SSDs remains robust.
  • Special Report: He bet half his $9 billion on ONE stock (From Stansberry Research)

Continued supply shortages, dramatic price increases, surging AI demand, and persistent competition across international markets have all contributed to volatility in the computer memory industry. With the impending IPO of China’s ChangXin Memory Technologies, the landscape is likely to only become more competitive and uncertain in the near-term. Still, many tech firms are scrambling to secure supply despite an intensifying marketplace and new competition.

The result is an environment that could be beneficial to many participants in the memory storage space, although for different reasons. Makers of hard disk drives (HDDs) face different challenges and opportunities than companies behind NAND flash tools or enterprise solid-state drives (SSDs), for instance. This means that companies including Seagate Technology (NASDAQ: STX), Western Digital Corp. (NASDAQ: WDC), and Sandisk Corp. (NASDAQ: SNDK)can all find a niche and, potentially, room for further share price appreciation.

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Seagate’s HDD Business Soars, But What Upside Remains?

Seagate is a major manufacturer of HDDs, which are increasingly popular among hyperscalers because they remain cheaper alternatives to some other types of memory products. The company is also an emerging leader in heat-assisted magnetic recording (HAMR), an advanced technology that may be poised for a demand surge in the coming years.

This positioning has benefited Seagate’s financial performance considerably: in the latest quarter, the company grew revenue by 44% year over year (YOY) to $3.1 billion while achieving a non-GAAP gross margin of 47%. Both top- and bottom-line performance came in well ahead of analyst expectations, as the firm beat predictions for earnings per share (EPS) by a solid 59 cents. HAMR momentum in particular helped to drive some of these gains.

Strong guidance for the foreseeable future and a long-term revenue growth target of at least 20% per year suggest that Seagate may be able to continue to ride this momentum, which has already contributed to shares coming close to tripling year to date (YTD). Even still, analysts expect additional upside, with a consensus price target close to $899, and 22 of 27 ratings for STX are Buys.

What investors might watch out for with this stock are its potential for future growth, given its dramatic rally in recent months, as well as its heavy reliance on HDDs and related technologies.

Western Digital’s Cleaner Post-Spin-Off Business Finds Its Legs

Western Digital has had almost a year and a half since officially spinning off Sandisk as a separate company focused on flash memory and SSD. The result is a company that is streamlined to focus on enterprise HDDs, with strong pricing and improving profitability metrics. While the firm is likely behind Seagate on its capacity to commercialize HAMR products and has a smaller share of the enterprise HDD space, its long-term agreements give it strong support for years to come.

In the most recent quarter, Western Digital boosted revenue by 45% YOY to $3.3 billion while almost doubling EPS over the same period. Its gross margin of 50.5% is also notable, as the firm was able to cut more than $3 billion in debt and generated close to $1 billion in free cash flow. At the same time, Western Digital has been aggressive about shareholder value returns, repurchasing $752 million in stock last quarter and boosting its dividend in the process.

Like STX, WDC shares have almost tripled YTD, and analysts suspect that this momentum may have stalled somewhat. Still, 20 out of 24 call WDC a Buy heading into the second half of the year.

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Sandisk Stock Remains in Focus After Its Spin-Off

Investors considering Western Digital will also want to look at how Sandisk has fared after the spin-off. SNDK shares are up some 458% YTD, a massive rally to be sure, but have fallen by more than 27% in the last month. This volatility makes SNDK stand out somewhat in the memory space but could also present opportunities for investors willing to accept the risk.

On the business side, Sandisk has performed exceptionally well: the latest quarterbrought several multi-year new business agreements worth tens of billions of dollars, 251% YOY revenue improvement to nearly $6 billion, adjusted free cash flow of almost $3 billion, and gross margin of 78.4%. Management sees a strong quarter to come as well, including revenue between $7.75 billion and $8.25 billion and gross margin as high as 81%. The company is also engaging in a massive share buyback program.

It goes to show just how well Sandisk has done that even after the massive rally, Wall Street still sees 17% in possible upside. In terms of ratings, 21 Buys and five Holdssuggest a very bullish perspective among analysts, making SNDK a standout even within a strong industry.

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I was born on 6 August 1956 in San Francisco, California to Janet and (the late) Richard Hovis. I grew up in Santa Monica, California where I attended elementary, junior high school, and high school (graduating in 1974), in addition to involvement in sports and recreation (Little League +, the Boy’s Club ++). Further, it was in elementary school – St. Augustine’s By-the -Sea Parish School that I found, and made the choice to truly journey with God. I attended Arizona State University from 1974 to 1977 – seeking to become an architect, however, I was not accepted, and, as such, I graduated with a Liberal Arts degree. Upon graduation from Arizona State University, I attended Cal Poly San Luis Obispo and studied City and Regional Planning at the Master’s level. I successfully completed one (1) year in a two (2) year program – I did not complete the Master’s degree in City and Regional Planning – due to personal reasons. I returned to Santa Monica where I started (October 1979) my career as graphic designer with Exxon Company, USA. I spent five years with Exxon Company, USA. While working with Exxon Company, USA I was accepted into architectural school – Sci-Arc in Southern California, however, I did not attend preferring to stay with Exxon.. In 1982 I married Laura Flosi and in April 1983 we had our one and only child – Lauren Alain Hovis – a gift from God. We moved to Phoenix, Arizona in 1984 from Los Angeles, where I went to work as a graphic designer with Kitchell CEM (from 1985 -1987). From 1987 – 1995 I was an independent contractor, and a registered representative in mortgage finance, financial management, graphic design, and drafting. Further, I attended the University of Phoenix and successfully obtained a Master’s in Business Administration (MBA) in 1982. I was also a member of the Scottsdale Jaycees, where I became very involved in community events and projects. In 1994, I accepted a cartography position with the Defense Mapping Agency in Reston, Virginia. As such, I relocated from Phoenix to Reston. In 1998, I was accepted and worked as a Visual Information Officer with the Central Intelligence Agency. In 2002, I worked as a Support Officer until my retirement (due to a need for shoulder surgery) in September 2018. Away from my Federal Government service, I have been involved in various organizations and activities in Northern Virginia. In November of 2011, I married Rebecca Ouellette in Santa Monica, California. I reside in San Tan Valley, AZ with my two hamster - Jess and Timothy, our fish, our lizard - RJ Lizard., and our cats - Pearl and Grey. As to hobbies, I enjoy playing sports, attending sporting events, mentoring individuals from financial management to hamsters, building models, photography, travel, multimedia design, managing partner for RJ Hamster, and jazz – smooth jazz to a samba or a bossa nova. Love and God Bless, Peter – aka RJ Hamster Jo hi

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