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3 Computer Storage Devices Stocks With Huge Upside to Buy on the Dip
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Key Takeaways
WDC benefits from rising AI and cloud demand, boosting data center sales and high-capacity HDD adoption.
STX's high-capacity nearline production is largely booked through 2026, signaling strong AI-driven demand.
SNDK's data center revenues surge 76% year over year as AI workloads drive demand for enterprise SSD storage.
There has been a downturn in the computer storage devices industry in the past month due to concerns about the continuation of artificial intelligence (AI) trade and severe geopolitical conflicts in the Middle East, which resulted in soaring crude oil prices amid fears of a further rise in inflation.
Nevertheless, industry players are likely to gain from solid momentum in AI, cloud computing, Internet of Things (IoT), auto, connected devices and virtual reality in the long run. Here, we recommend three beaten-down computer storage devices stocks that fell more than 10% in the past month.
Western Digital has been witnessing strong execution amid intensified cloud and AI demand. WDC saw strong data center demand and increased adoption of high-capacity hard disk drives (HDDs). This reflects its ability to scale reliable, high-capacity storage solutions to meet the needs of the AI-driven data economy.
As AI and cloud adoption accelerate, demand for higher-density storage continues to rise. WDC is meeting this demand through close collaboration with hyperscalers, delivering reliable, high-capacity drives at scale with strong performance and total cost of ownership. WDC is advancing areal density gains, accelerating its HAMR and ePMR roadmaps, and driving adoption of higher-capacity and UltraSMR drives.
Future Catalysts
WDC expects the proliferation of generative AI-driven storage deployments to result in a client and consumer device refresh cycle, and boost content creation and storage in smartphone, gaming, PC and consumer electronics in the long run. Rising AI adoption is likely to drive increased storage demand across both HDD and Flash at the edge and core, thereby providing ample business opportunities.
Gen AI adoption is driving eSSD sales due to its speed, reliability and efficiency over HDDs. Growing AI data boosts demand, fueling eSSD market growth and reshaping storage. Agentic AI is driving future data growth, while its platform business is gaining traction among native AI firms and SaaS providers.
Solid Guidance
Western Digital expects continued momentum in the fiscal third quarter, supported by sustained data center demand and further adoption of high-capacity drives. At the midpoint of the guidance, the company expects non-GAAP revenues of $3.2 billion (+/- $100 million), up 40% year over year. Management projects non-GAAP EPS of $2.30 (+/- 15 cents).
Strong Estimate Revisions
Western Digital has an expected revenue and earnings growth rate of -6.4% and 81.7%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% over the last 30 days.
Impressive Short-Term Price Upside
The short-term average price target of brokerage firms for the stock represents an increase of 29.8% from the last closing price of $245.25. The brokerage target price is currently in the range of $1,70-$440. This indicates a maximum upside of 79.4% and a downside of 30.7%.
Image Source: Zacks Investment Research
Seagate Technology Holdings plc
Seagate Technology has been witnessing strong execution amid intensified cloud and AI demand. Management highlighted that modern data centers increasingly need solutions that balance performance with cost efficiency, a trend that strongly favors Seagate’s roadmap. STX’s areal-density-driven strategy aligns well with the long-term growth of AI-generated data, suggesting sustained demand beyond short-term cycles.
Future Catalysts
STX’s high-capacity nearline production is largely booked through 2026, with long-term contracts providing strong demand visibility through 2027. Advancing aerial density remains a major strength for STX and a key driver of progress across the entire hard drive industry.
STX’s aerial density roadmap ensures a lasting TCO advantage for hard drives over alternative technologies. Customers recognize the value of higher-capacity HAMR drives as the most efficient solution to meet growing AI-driven data storage demands.
In September 2025, STX announced an alliance with Acronis to provide MSPs and enterprises with secure, scalable storage for AI-driven data growth. Seagate and Acronis will offer Acronis Archival Storage, a secure, compliant, cost-efficient S3 solution using Seagate’s Lyve Cloud. Designed for MSPs and regulated sectors, it provides long-term data storage with enterprise-grade security, predictable costs and full compliance support.
Solid Guidance
Seagate Technology expects demand to remain strong, especially from global cloud customers, and is likely to more than offset the typical March-quarter seasonality in the Edge IoT markets. For the fiscal third quarter, STX expects revenues of $2.9 billion (+/- $100 million). At the midpoint, this indicates a 34% year-over-year improvement.
Non-GAAP earnings are expected to be $3.40 per share (+/- 20 cents). For the quarter, non-GAAP operating expenses are expected to be around $290 million. At the midpoint of the revenue guidance, non-GAAP operating margin is projected to increase to approximately 30%. STX expects free cash flow to increase further in the March quarter.
Strong Estimate Revisions
Seagate Technology has an expected revenue and earnings growth rate of 24.9% and 56.5%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.4% over the last 30 days.
Excellent Short-Term Price Upside
The short-term average price target of brokerage firms for the stock represents an increase of 32.4% from the last closing price of $352.80. The brokerage target price is currently in the range of $270-$700. This indicates a maximum upside of 98.3% and a downside of 23.5%.
Image Source: Zacks Investment Research
Sandisk Corp.
Sandisk has benefited from the structural shift toward AI computing, which requires significantly more NAND flash storage per deployment compared with traditional workloads. AI training models and inference applications generate massive data volumes that demand high-performance enterprise solid-state drives, while edge devices need greater storage capacity to support on-device AI features.
This creates a favorable demand environment where SNDK can command premium pricing for its advanced technology products while maintaining disciplined supply allocation. The benefits materialized in the fiscal second-quarter performance, with datacenter revenues surging 76% year over year, driven by adoption across cloud hyperscalers and enterprise customers.
SNDK’s BiCS8 quad-level cell storage product continues to advance through qualification with two major hyperscalers and is expected to generate revenues soon. The extended joint venture agreement with Kioxia Corporation through December 2034 positions Sandisk favorably against peers.
Strong Guidance
Sandisk maintains a positive outlook for the third quarter of fiscal 2026, expecting revenues between $4.4 billion and $4.8 billion, representing another substantial sequential increase at the midpoint. Gross margin is projected to expand further to a range of 65-67%. Earnings per share guidance of $12 to $14 reflects continued pricing strength and improved product mix. This indicates that the structural improvements in the NAND market are sustainable rather than cyclical.
Solid Estimate Revisions
SNDK has an expected revenue and earnings growth rate of 94.1% and more than 100%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved more than 100% in the last 60 days.
Massive Short-Term Price Upside
The short-term average price target of brokerage firms for the stock represents an increase of 32.9% from the last closing price of $527.33. The brokerage target price is currently in the range of $235-$1,000. This indicates a maximum upside of 89.6% and a downside of 55.4%.
Image Source: Zacks Investment Research
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3 Computer Storage Devices Stocks With Huge Upside to Buy on the Dip
Key Takeaways
There has been a downturn in the computer storage devices industry in the past month due to concerns about the continuation of artificial intelligence (AI) trade and severe geopolitical conflicts in the Middle East, which resulted in soaring crude oil prices amid fears of a further rise in inflation.
Nevertheless, industry players are likely to gain from solid momentum in AI, cloud computing, Internet of Things (IoT), auto, connected devices and virtual reality in the long run. Here, we recommend three beaten-down computer storage devices stocks that fell more than 10% in the past month.
These companies are: Western Digital Corp. (WDC - Free Report) , Seagate Technology Holdings plc (STX - Free Report) and Sandisk Corp. (SNDK - Free Report) . These stocks have huge short-term upside left. Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Western Digital Corp.
Western Digital has been witnessing strong execution amid intensified cloud and AI demand. WDC saw strong data center demand and increased adoption of high-capacity hard disk drives (HDDs). This reflects its ability to scale reliable, high-capacity storage solutions to meet the needs of the AI-driven data economy.
As AI and cloud adoption accelerate, demand for higher-density storage continues to rise. WDC is meeting this demand through close collaboration with hyperscalers, delivering reliable, high-capacity drives at scale with strong performance and total cost of ownership. WDC is advancing areal density gains, accelerating its HAMR and ePMR roadmaps, and driving adoption of higher-capacity and UltraSMR drives.
Future Catalysts
WDC expects the proliferation of generative AI-driven storage deployments to result in a client and consumer device refresh cycle, and boost content creation and storage in smartphone, gaming, PC and consumer electronics in the long run. Rising AI adoption is likely to drive increased storage demand across both HDD and Flash at the edge and core, thereby providing ample business opportunities.
Gen AI adoption is driving eSSD sales due to its speed, reliability and efficiency over HDDs. Growing AI data boosts demand, fueling eSSD market growth and reshaping storage. Agentic AI is driving future data growth, while its platform business is gaining traction among native AI firms and SaaS providers.
Solid Guidance
Western Digital expects continued momentum in the fiscal third quarter, supported by sustained data center demand and further adoption of high-capacity drives. At the midpoint of the guidance, the company expects non-GAAP revenues of $3.2 billion (+/- $100 million), up 40% year over year. Management projects non-GAAP EPS of $2.30 (+/- 15 cents).
Strong Estimate Revisions
Western Digital has an expected revenue and earnings growth rate of -6.4% and 81.7%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% over the last 30 days.
Impressive Short-Term Price Upside
The short-term average price target of brokerage firms for the stock represents an increase of 29.8% from the last closing price of $245.25. The brokerage target price is currently in the range of $1,70-$440. This indicates a maximum upside of 79.4% and a downside of 30.7%.
Image Source: Zacks Investment Research
Seagate Technology Holdings plc
Seagate Technology has been witnessing strong execution amid intensified cloud and AI demand. Management highlighted that modern data centers increasingly need solutions that balance performance with cost efficiency, a trend that strongly favors Seagate’s roadmap. STX’s areal-density-driven strategy aligns well with the long-term growth of AI-generated data, suggesting sustained demand beyond short-term cycles.
Future Catalysts
STX’s high-capacity nearline production is largely booked through 2026, with long-term contracts providing strong demand visibility through 2027. Advancing aerial density remains a major strength for STX and a key driver of progress across the entire hard drive industry.
STX’s aerial density roadmap ensures a lasting TCO advantage for hard drives over alternative technologies. Customers recognize the value of higher-capacity HAMR drives as the most efficient solution to meet growing AI-driven data storage demands.
In September 2025, STX announced an alliance with Acronis to provide MSPs and enterprises with secure, scalable storage for AI-driven data growth. Seagate and Acronis will offer Acronis Archival Storage, a secure, compliant, cost-efficient S3 solution using Seagate’s Lyve Cloud. Designed for MSPs and regulated sectors, it provides long-term data storage with enterprise-grade security, predictable costs and full compliance support.
Solid Guidance
Seagate Technology expects demand to remain strong, especially from global cloud customers, and is likely to more than offset the typical March-quarter seasonality in the Edge IoT markets. For the fiscal third quarter, STX expects revenues of $2.9 billion (+/- $100 million). At the midpoint, this indicates a 34% year-over-year improvement.
Non-GAAP earnings are expected to be $3.40 per share (+/- 20 cents). For the quarter, non-GAAP operating expenses are expected to be around $290 million. At the midpoint of the revenue guidance, non-GAAP operating margin is projected to increase to approximately 30%. STX expects free cash flow to increase further in the March quarter.
Strong Estimate Revisions
Seagate Technology has an expected revenue and earnings growth rate of 24.9% and 56.5%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.4% over the last 30 days.
Excellent Short-Term Price Upside
The short-term average price target of brokerage firms for the stock represents an increase of 32.4% from the last closing price of $352.80. The brokerage target price is currently in the range of $270-$700. This indicates a maximum upside of 98.3% and a downside of 23.5%.
Image Source: Zacks Investment Research
Sandisk Corp.
Sandisk has benefited from the structural shift toward AI computing, which requires significantly more NAND flash storage per deployment compared with traditional workloads. AI training models and inference applications generate massive data volumes that demand high-performance enterprise solid-state drives, while edge devices need greater storage capacity to support on-device AI features.
This creates a favorable demand environment where SNDK can command premium pricing for its advanced technology products while maintaining disciplined supply allocation. The benefits materialized in the fiscal second-quarter performance, with datacenter revenues surging 76% year over year, driven by adoption across cloud hyperscalers and enterprise customers.
SNDK’s BiCS8 quad-level cell storage product continues to advance through qualification with two major hyperscalers and is expected to generate revenues soon. The extended joint venture agreement with Kioxia Corporation through December 2034 positions Sandisk favorably against peers.
Strong Guidance
Sandisk maintains a positive outlook for the third quarter of fiscal 2026, expecting revenues between $4.4 billion and $4.8 billion, representing another substantial sequential increase at the midpoint. Gross margin is projected to expand further to a range of 65-67%. Earnings per share guidance of $12 to $14 reflects continued pricing strength and improved product mix. This indicates that the structural improvements in the NAND market are sustainable rather than cyclical.
Solid Estimate Revisions
SNDK has an expected revenue and earnings growth rate of 94.1% and more than 100%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved more than 100% in the last 60 days.
Massive Short-Term Price Upside
The short-term average price target of brokerage firms for the stock represents an increase of 32.9% from the last closing price of $527.33. The brokerage target price is currently in the range of $235-$1,000. This indicates a maximum upside of 89.6% and a downside of 55.4%.
Image Source: Zacks Investment Research