SanDisk and Western Digital are the Real AI Kings of 2026

As investors turned their back on software (notably, the seat-based software-as-a-service companies), they’re turned towards hardware in a big-time way. You wouldn’t know it by looking at those flat shares of Nvidia (NASDAQ:NVDA | NVDA Price Prediction), but the iShares Semiconductor ETF (NASDAQ:SOXX) is up around 13% year to date, with few signs of slowing down. The winners within semis have been broad, but the undisputed kings of the 2026 semiconductor surge belongs to the memory and storage stocks. Could “storage” really be the “new gold” as the AI revolution looks to play out while hardware constraints look to be the hot topic for the hyperscalers?

Undoubtedly, storage stands out as the massive bottleneck in this AI boom, especially as backlogs swell and lead times spike. As AI agents and a new slate of AI-native apps hit the market, perhaps the memory storage demand could intensify, allowing the big players to raise the bar on pricing.

It’s not just the AI revolution that’s powering this unprecedented memory storage boom. With quantum computing’s ascent looming, some have opted to “Harvest [data] now, Decrypt Later,” which certainly seems to be a smart way to go as quantum looks to make big leaps of its own going into 2030. In any case, the big question is whether it’s a tad too late in the game to be a net buyer of the storage plays.

The gains keep coming for Sandisk and Western Digital 

After all, they’ve spent most of 2025 blasting off, with Sandisk (NASDAQ:SNDK) posting an unprecedented gain of 1,747% over the past year. Meanwhile, Western Digital (NASDAQ:WDC) is up around 455% in the timespan. Such “commoditized” storage hardware suddenly became a precious resource critical to AI advancement. And it’s unclear when things will normalize, especially as technological trends look to add to the appetite of firms across the board.

As SanDisk and Western Digital shares enjoy their Nvidia-like moments, some investors are surely asking themselves whether the parabolic ascent is sustainable or not. JPMorgan and a number of analysts don’t seem to be in a hurry to downgrade in response to the rapid share price appreciation.

Notably, it feels like raising the price target bar is the natural way to go, given the improving fundamentals and the multi-year opportunity to call the shots in a market that can’t satiate its hunger for storage.

Analysts see more upside, and shares still look reasonably priced

With JPMorgan raising its price target on shares of Western Digital to $320.00 per share, I think it’s not too late in the game to be adding to positions in this year’s AI kings. They’re leaders and earnings growth will be in the driver’s seat. Notably, with “robust commercial agreements” stretching as far as 2028, it feels like the latest outperformers of the AI boom aren’t about roll over anytime soon.

Of course, it’s never fun to buy high, but at 25.5 times trailing price-to-earnings (P/E), shares of Western Digital still don’t seem overvalued in the slightest. If analysts are underestimating the extent of the AI tailwinds, perhaps the new “pick and shovels” play is worth sticking with, especially as the AI data centers look to really start flooring it to keep pace with the compute needs of the biggest AI spenders.

While the pace of gains will eventually slow, I’m not so sure if the peak has arrived, especially if 2026 is a year of monetization, as enterprise agents and highly-personalized and specialized AI look to become as useful as they’ve ever been. Of course, there are lower-risk ways to get AI upside out there, but, in my view, playing the bottlenecks in the AI stack could continue to be the most profitable way to do it.