The astonishing rally of the artificial intelligence (AI) trade has been suffering from persistent volatility over the past month. Extremely overstretched valuation of these stocks, unabated inflationary pressure due to fluctuations in crude oil prices resulting from geopolitical conflicts in the Middle East and growing expectations of a 25-basis point hike in the benchmark interest rate by the Fed in September are the primary reasons for recent AI trade volatility. 

Nonetheless, we have identified three AI behemoths with a top Zacks Rank that are currently trading at a significant discount from their 52-week high price. Moreover, these stocks have huge price upside potential in the short term.

The stocks are: Sandisk Corp. (SNDK Quick QuoteSNDK - Free Report) , Western Digital Corp. (WDC Quick QuoteWDC - Free Report) and Ciena Corp. (CIEN Quick QuoteCIEN - Free Report) . 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.

The chart below shows the price performance of our three picks in the past month.

Image Source: Zacks Investment Research

Sandisk Corp.

Sandisk — a leading flash and advanced memory technology innovator — is set to maintain its astonishing momentum. SNDK 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. SNDK’s BiCS8 quad-level cell storage product continues to advance through qualification with two major hyperscalers. The extended joint venture agreement with Kioxia Corporation through December 2034 positions Sandisk favorably in the AI memory and storage space. 

Sandisk has an expected revenue and earnings growth rate of more than 100%, each for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.6% over the last 30 days.

Massive Short-Term Price Upside Potential

Sandisk is currently trading at a 32.5% discount to its 52-week high price of $2,354.39 recorded on June 22. The short-term average price target of brokerage firms represents an increase of 49.8% from the last closing price of $1,589.40. The brokerage target price is currently in the range of $1,000-$3,250. This indicates a maximum upside of 104.5% and a maximum downside of 37.1%. The risk/reward ratio is highly favorable 1:2.82. 

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.

Western Digital has an expected revenue and earnings growth rate of 38.1% and 85.1%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 1.8% over the last 30 days.

Solid Short-Term Price Upside Potential

Western Digital is currently trading at a 31.4% discount to its 52-week high price of $799.87 recorded on June 18. The short-term average price target of brokerage firms represents an increase of 16.4% from the last closing price of $548.39. The brokerage target price is currently in the range of $450-$1.050. This indicates a maximum upside of 91.5% and a maximum downside of 17.9%. The risk/reward ratio is extremely favorable 1:5.1. 

Ciena Corp.

Ciena is well poised to benefit from AI-led demand for optical networking across cloud and service providers and a growing backlog despite ongoing supply woes. Expanding bandwidth needs, rising data center interconnect activity and solid uptake of coherent optical technologies bode well. 

Ciena's revenues are primarily generated from packet optical transport, switching products, integrated networks and software platforms. CIEN continues to diversify its footprint in data center connectivity and AI networking infrastructure. Management reported new hyperscaler wins for coherent modules, additional DCOM customer engagements and continued demand for 400G and 800G pluggables.

Strong traction in Hyper-Rail, DCOM and coherent modules reinforces CIEN’s position in high-speed connectivity and broadens its opportunities across WAN and data center environments. CIEN is also driving operating leverage through higher margins, earnings and cash flow. CIEN raised its fiscal 2026 revenue outlook to $6.3 billion, up 32% at the midpoint.

Ciena has an expected revenue and earnings growth rate of 32.4% and more than 100%, respectively, for the current year (ending October 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 5.8% in the last 60 days.

Robust Short-Term Price Upside Potential

Ciena is currently trading at a 35.9% discount to its 52-week high price of $637.51 recorded on June 3. The short-term average price target of brokerage firms represents an increase of 45.5% from the last closing price of $408.73. The brokerage target price is currently in the range of $450-$720. This indicates a maximum upside of 76.2% and no downside. The risk/reward ratio is extremely favorable.