TECH - 2 Data Storage Device Stocks Thriving From the AI Boom | Benzinga
The artificial intelligence (AI) boom has accelerated revenues for various companies in the computer and technology sector. The obvious benefactor and leader of the AI wave is Nvidia Co. (NASDAQ: NVDA), with its 90% market share of GPUs. AI requires heavy-duty processing power but also a massive amount of data to train AI models. This requires the ability to store oceans of data, as evidenced by the surge in revenues for Micron Technology Inc. (NASDAQ: MU), maker of DRAM, NAND and flash memory chips. The benefits continue to trickle down to the data storage device companies that buy mountains of memory storage chips to meet the insatiable demand in their businesses. Here are 2 leading data storage device makers that are thriving on the AI boom as their troughs are reversing back into peaks.
Western Digital
Western Digital Co. (NASDAQ: WDC) manufactures hard disk drives (HDDs) and solid-state drives (SSDs). As a leader in the data storage industry, they have been migrating to the forefront of SSD with its acquisition of flash drive maker SanDisk in 2016. Their products range from traditional HDDs, which are mechanical storage devices for bulk data storage, to SSDs, which are faster and more reliable due to no moving parts.
Western Digital also manufactures data center storage systems as well as consumer storage devices, including SSDs, USB drives and external hard drives. Their business is booming with the AI trend. The company has plans to separate its HDD, which focuses on traditional HDs and mechanical storage solutions, and Flash business, focusing on NAND flash memory, units into 2 separate companies.
AI Accelerating Turnaround
Western Digital reported a fiscal Q2 2024 EPS loss of 69 cents, beating consensus analyst estimates for a loss of $1.12 by 43 cents. Revenues fell 2.4% YoY to $3.03 billion, beating consensus estimates for $3 billion. The surge in data storage device demand caused them to raise their forward guidance.