These Lesser Known AI Stocks Are Reaching Record Highs

Key Concepts

• AI-Driven Data Storage Demand: Increased demand for both hard disk drives (HDDs) and flash memory due to the data requirements of training and running AI models.
• HDD Revival: Unexpected resurgence of hard drive manufacturers (Seagate, Western Digital) after a period of decline.
• Flash Memory Growth: Significant growth in flash memory manufacturers (SanDisk, Micron, Samsung, SK Hynix, CXMT) alongside the HDD recovery.
• Data Center Expansion: Massive investment in data centers to support AI development, driving storage demand.
• Cold Storage: Utilizing HDDs for long-term, less frequently accessed data storage due to cost-effectiveness.
• Supply Constraints: Limited supply of HDDs contributing to price increases and revenue growth for manufacturers.

The Unexpected Rise of Data Storage Stocks in the Age of AI

The video highlights a significant, yet often overlooked, beneficiary of the current AI boom: data storage companies. While Nvidia and Alphabet receive considerable attention, manufacturers of both hard disk drives (HDDs) and flash memory have experienced substantial stock gains in the last year. Specifically, Seagate and Western Digital have seen their stock prices increase by over 220% and 300% respectively, significantly outpacing the gains of AI giants like Alphabet (65%) and Nvidia (35%). Flash memory manufacturers, including SanDisk and Micron Technology, have experienced even more dramatic growth, with increases of approximately 850% and 230% year-over-year.

Driving Forces Behind the Demand

This surge in demand is directly linked to the exponential growth of data generated by AI models. The video emphasizes that AI isn’t limited to text generation; it encompasses a wide range of data types including photos, audio, and video. As Carl Arian of BNP Paribus explains, “The more text, videos, and pictures we generate, ideally, we want to store more of them, and the storage content of those videos and pictures are a heck of a lot more than text.” This increased data volume necessitates expanded storage capacity.

Furthermore, tech companies are investing heavily in data centers to accommodate this demand. McKenzie estimates a $800 billion spend on storage alone within the next five years, representing a substantial, though smaller, portion of the overall $3.5 trillion projected investment in GPUs and CPUs from Nvidia, AMD, and Intel.

The HDD Comeback: From Brink of Collapse to Record Highs

The video details a remarkable turnaround for HDD manufacturers. In the 2010s, the rise of flash drives – smaller and more efficient for consumer devices – led to a decline in the HDD market. This resulted in bankruptcies, facility closures, and consolidation within the industry. According to Acriman, flash drives “cannibalized the hard drive market.” The global HDD market shrank from approximately 20 companies in the 1990s, predominantly US-based, to just Seagate, Western Digital (US), and Toshiba today.

However, the demand for HDDs has resurfaced due to their cost-effectiveness for “cold storage” – long-term archiving of data. HDDs can be up to 10 times cheaper than flash storage, making them ideal for data centers needing large capacity at a lower price point. CJ Muse of Caner Fitzgerald notes the current supply situation: “You can't get your hands on hard drives today. The two main hard drive players are not adding supply and are acting extraordinarily rational, which makes perfect sense because of the pain that the industry went through over the prior decade.”

Financial Performance of Key Players (October 2025 & Fiscal Year Ending June 2025)

The video provides specific financial data demonstrating the growth of these companies:

• Seagate:
  • Q4 Revenue (ending October 2025): $2.6 billion (up 21% year-over-year)
  • Full Year Revenue: $9 billion (up 39% from previous year)
  • Compared to a low of $6.55 billion in FY2024.
• Western Digital:
  • Q4 Revenue (ending October 2025): $2.8 billion (up 27% year-over-year)
  • Full Year Revenue: $9.5 billion (up 51% from previous year)
• SanDisk:
  • Q4 Revenue (ending October 2025): $2.3 billion (up 23% year-over-year)
• Micron:
  • Q4 Revenue (ending October 2025): $13.6 billion (up 56% year-over-year)

Flash Memory’s Role & Global Landscape

While HDDs have experienced a revival, flash memory manufacturers are also benefiting from the increased demand. US-based players like SanDisk and Micron, alongside international companies such as Samsung, SK Hynix, and CXMT, are all experiencing significant revenue growth. The video highlights that the “hard drive crunch” is contributing to the success of flash memory providers as well.

Logical Connections & Synthesis

The video establishes a clear causal link between the growth of AI, the resulting explosion of data, and the subsequent demand for data storage solutions. It demonstrates how a previously struggling industry (HDDs) has been revitalized by this demand, while simultaneously highlighting the continued growth of the flash memory market. The financial data presented reinforces the narrative of substantial gains for companies in both sectors. The video effectively argues that investors should not overlook these “lesser-known” AI-related stocks, as they are poised to continue benefiting from the ongoing AI revolution.