Not Micron. Not Sandisk. This Storage Stock Is Riding the Same AI Infrastructure Wave.
The stock is up more than 100% this year but still flies under the radar.
When it comes to artificial intelligence (AI) infrastructure stocks, Western Digital has been garnering attention this year. While Micron Technology and Sandisk are benefiting from the demand for memory and storage in AI data centers, Western Digital provides a different aspect of the AI infrastructure business through its high-capacity hard disk drives (HDDs).
HDDs offer a cost-effective solution for storing large amounts of information, which is crucial for AI companies storing training data sets, model outputs, and historical records. A survey revealed that 87% of respondents prioritize expanding storage capacity and reducing costs, with 70% using hard drives for over half of their storage capacity.
Western Digital is also developing new, larger-capacity drives, such as a 40-terabyte drive currently undergoing customer qualification. Demand for data storage is increasing, with 61% of surveyed organizations experiencing at least 25% data growth due to AI, and 75% expecting similar growth in the next three years. Western Digital's revenue for its fiscal fourth quarter was $3.75 billion, up 44% year-over-year, and adjusted net income increased by 1,215% to $3.19 billion.
The company's focus on hard drives provides a unique opportunity to participate in the growth of AI infrastructure without relying on the performance of individual processors.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
