Data storage firms Western Digital, Seagate soar on AI-driven demand spike
Both stocks are trading near record highs
[NEW YORK] Shares of data storage companies such as Seagate and Western Digital (WDC) have sharply outperformed the broader market this year, powered by the staggering demand for hard drives in the global race to scale up AI-related infrastructure.
Both Seagate and Western Digital stocks are trading near record highs, having surged more than 200 per cent this year on the artificial intelligence boom.
Western Digital gained 10.5 per cent in premarket trading on Friday (Oct 31) after it forecast second-quarter earnings above Wall Street estimates.
“The fact that WDC has secured purchase orders extending through CY26 with five of its largest customers is a clear indication that customers are unwilling to risk falling short on storage capacity as AI-related demand continues to march higher,” JPMorgan analysts said in a note.
Earlier this week, rival Seagate Technology also forecast second-quarter revenue and profit above estimates late on Tuesday. Its shares have surged 20 per cent since, and were up 1.7 per cent on Friday.
Seagate and Western Digital are the second and third-highest percentage gainers this year on the S&P 500, only behind trading platform operator Robinhood.
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Smaller rival Sandisk, spun out of Western Digital in February, has also seen a five-fold jump in its stock since listing. Shares of the company, which will report its results on Nov 6, were up 3.1 per cent on Friday.
The S&P 1500 technology hardware, storage and peripherals sector – which houses all three companies – has jumped more than 11 per cent for the year and hit a record high on Thursday.
Tech giants Alphabet, Microsoft, Meta and Amazon all announced plans for higher annual capital expenditures as they pour money into chips and data centres.
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Global AI-related infrastructure spending could reach US$3 trillion to US$4 trillion by 2030, Goldman Sachs estimates.
“If you went back twelve months or twenty-four months and you asked somebody about AI, they wouldn’t have talked about hard disks... It’s exciting,” said Martin Frandsen, portfolio manager at Principal Asset Management. REUTERS
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