AI-Powered Surge: Which Storage Devices of Computer Players Will Dominate 2026?

The intersection of artificial intelligence and data infrastructure is reshaping market opportunities in unprecedented ways. As enterprises scale AI workloads, their appetite for advanced storage solutions continues accelerating—a trend that’s creating substantial tailwinds for key players in the storage devices of computer sector. The momentum stems from multiple converging forces: exponential cloud infrastructure expansion, IoT proliferation, automotive electrification, edge computing deployment, and the relentless data demands of generative AI systems.

Behind the scenes, companies are deploying AIOps and machine learning capabilities to optimize storage architectures. Virtualization technologies are becoming standard practice for efficient data management, while edge computing architectures help organizations minimize latency as data volumes surge from connected devices. This ecosystem shift has positioned three storage manufacturers for potential outperformance: Western Digital Corp. WDC, Seagate Technology Holdings plc STX, and Teradata Corp. TDC—each holding Zacks Rank #1 (Strong Buy) ratings.

Western Digital: Riding the AI Storage Wave

Western Digital is executing at an impressive clip as cloud demand and AI adoption accelerate simultaneously. The cloud segment, representing 89% of revenue, jumped 31% in the most recent quarter, propelled by enterprise demand for high-capacity nearline HDDs. The company has ramped ePMR product shipments, with 26TB CMR and 32TB UltraSMR drives now scaling production. HAMR technology deployment is on schedule for the first half of 2027, positioning WDC to capture next-generation capacity requirements.

Generative AI is triggering a refresh cycle across client and consumer devices, with implications for content storage in gaming, smartphones, PCs and connected electronics. The proliferation of AI deployments is expanding storage needs across both HDD and flash technologies at the network edge and core infrastructure. Notably, eSSD adoption is accelerating due to superior speed, reliability and efficiency metrics compared to traditional HDDs. AI-driven data growth is reshaping the storage landscape, while agentic AI applications are spurring platform adoption among native AI companies and SaaS vendors.

Management projects fiscal Q2 2026 revenues of $2.9 billion (±$100 million), representing 20% growth fueled by sustained data center momentum and high-capacity drive uptake. For the fiscal year ending June 2026, Western Digital anticipates revenue decline of 12.1% offset by earnings growth of 54.8%. The Zacks consensus estimate for current-year earnings has strengthened 15.3% over the past two months, signaling improving market sentiment.

Seagate: Capitalizing on Data Center Dominance

Seagate’s positioning benefits from robust global cloud infrastructure spending and accelerating HAMR drive adoption in high-capacity applications. The data center vertical represents the lion’s share of STX revenues, with substantial booking visibility through 2026 and beyond. Long-term contracts with hyperscalers provide predictable demand through 2027.

High-capacity nearline production capacity is substantially committed through 2026, underpinned by cloud infrastructure and AI workload requirements. The company is guiding fiscal Q2 2026 revenue at $2.7 billion (±$100 million), implying 16% year-over-year growth at the midpoint. Seagate’s advancing areal density technology remains a competitive moat—enabling lasting total-cost-of-ownership advantages versus alternative storage technologies. Enterprise customers increasingly recognize higher-capacity HAMR drives as the most cost-efficient solution for scaling AI data storage operations.

In September 2025, Seagate established a strategic partnership with Acronis to deliver secure, scalable archival storage solutions for managed service providers and enterprises managing AI-driven data growth. The Acronis Archival Storage offering provides S3-compatible infrastructure powered by Seagate’s Lyve Cloud platform, featuring enterprise-grade security, regulatory compliance, predictable pricing and long-term retention capabilities for regulated industry verticals.

Seagate projects fiscal 2026 revenue growth of 19% alongside earnings expansion of 39%. The Zacks consensus estimate for current-year earnings has risen 2.2% in the recent month, reflecting constructive analyst revisions.

Teradata: Enterprise AI Data Platform Evolution

Teradata’s trajectory is benefiting from improving annual recurring revenue dynamics, operational cost reductions, and productivity optimization initiatives—collectively supporting robust free cash flow generation. The emergence of agentic AI workloads demanding continuous, always-on query capabilities creates favorable conditions for enterprise data platforms. Teradata manages mission-critical enterprise data infrastructure while delivering the performance characteristics required by sophisticated AI applications.

The company has positioned its autonomous AI and knowledge platform as purpose-built for agentic workloads, emphasizing optimal price-performance economics across on-premises and cloud deployment models. Its product portfolio encompasses QueryGrid data analytics fabric, Enterprise Vector Store, AgentBuilder, and ClearScape Analytics with integrated ModelOps—collectively targeting top-line expansion.

Recent acquisitions, including Stemma, have enhanced data discovery and exploration capabilities, expanding analytical value propositions. Innovative features like ask.ai simplify natural language query interfaces, reducing user friction. Enhanced ModelOps capabilities within ClearScape Analytics now offer no-code functionality, enabling rapid AI expansion while maintaining enterprise governance compliance. The newly launched Enterprise Vector Store brings vector-based processing to core analytics, enabling retrieval-augmented generation and agentic AI capabilities for real-time operational decisions.

For the upcoming year, Teradata anticipates revenue remaining essentially flat at -0.6% decline, with earnings growth of 3.3%. Zacks consensus estimates for next-year earnings have improved 0.4% over the past month.

The Investment Thesis

The storage devices of computer market is experiencing structural acceleration driven by AI infrastructure demands, cloud computing expansion, and edge computing architecture adoption. These three companies—Western Digital, Seagate, and Teradata—collectively represent distinct yet complementary exposures to this secular growth dynamic. Each carries Zacks Rank #1 designation, suggesting meaningful upside potential for investors seeking data infrastructure exposure heading into 2026.