Analyst Sees Memory Demand Surging as AI Grows, Names Sandisk and Seagate as Beneficiaries

A new wave of artificial intelligence development is creating a significant opportunity for data storage companies, according to a recent analysis from Bernstein. The firm points to the expanding size of AI models as a primary catalyst, predicting a sharp increase in demand for a specific type of memory.

As these AI systems become more complex, they require vast repositories of information that must be readily accessible, though not necessarily instantaneously. This need is met by nearline storage, a tier of memory that sits between high-speed flash storage and long-term archival systems. Bernstein's report suggests the industry is approaching an inflection point where this category will see substantial growth.

The analysis identifies Western Digital's Sandisk brand and competitor Seagate Technology as companies positioned to gain from this trend. The logic is straightforward: the hardware that holds the building blocks for advanced AI must come from somewhere. If Bernstein's projection is correct, manufacturers supplying the necessary drives and components will see their order books fill up.

This outlook follows a period of remarkable performance for Sandisk, whose stock has already experienced a dramatic rise. The new forecast indicates that the underlying market forces that fueled that initial surge are not only persistent but intensifying. For investors, the message is that the infrastructure supporting the AI revolution extends beyond processors and software to the essential, if less glamorous, world of data storage.

Source: MarketWatch