"They require massive amounts of storage hardware, and both of these companies produce plenty. Unfortunately, all that production is not enough to meet demand. Hyperscalers alone are investing to the tune of $400 billion this year. Much of that spending is on hardware required by AI. Text AI models alone were enough to lift these stocks two years ago. Now, video and image AI models are training on 4K videos, so you can imagine just how much demand these companies are seeing."
"However, is this explosive demand here to stay, and does it justify how much you're paying for both of these stocks? SNDK stock is up over 1,250% over the past year, whereas WDC stock is up by over 400%. Their stock prices have gone up much faster than earnings. Let's first look at Western Digital. WDC stock may not be as expensive as you think If you compare what you're paying for them right now, it will look quite expensive."
Hyperscalers are committing roughly $400 billion this year, with a large share directed toward AI hardware that requires vast storage capacity. Video and image AI training on 4K content is intensifying storage demand beyond earlier text-only model needs. SNDK shares rose over 1,250% and WDC shares rose over 400% in the past year, outpacing earnings growth. Western Digital currently trades above historical multiples but benefits from sustained data-center buildouts. Analysts project strong EPS and revenue growth, though some estimates may undercount AI-driven upside. Western Digital recently beat EPS (excluding one-offs) and revenue estimates.
Read at 24/7 Wall St.
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