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11 hours ago
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3 Storage Devices Stocks to Focus on From a Prospering Industry
The Zacks Computer-Storage Devices industry players are poised for robust growth driven by accelerating digital transformation, edge computing, AI workloads and enterprise cloud adoption. The democratization of higher internal memory smartphones, faster Internet speed, and 5G will likely act as a tailwind for industry participants. As cyberattacks continue to increase in frequency, the demand for end-to-end encryption will also drive growth in secure storage solutions. These factors propel the demand for sophisticated data storage solutions, bolstering computer storage product requirements. These factors are favorable for prominent industry players like Western Digital Corporation WDC, NetApp, Inc. NTAP and Teradata Corporation TDC. Nonetheless, escalating trade tensions, especially with China, global macroeconomic turbulence, along with volatile supply chain dynamics and associated inflation, remain headwinds. Industry Description The Zacks Computer-Storage Devices industry houses companies that design, develop, manufacture and market various hard disk drives (HDDs) and solid-state drives (SSDs). These drives are utilized in PCs, laptops, mobiles, servers, network-attached storage devices, video game consoles, digital video recorders and other consumer electronic devices. Some industry participants, including Pure Storage, provide software-defined all-flash solutions that are uniquely fast and cloud-capable for customers. Many industry players offer high-performance modular memory subsystems, mount and blade server systems, enterprise storage and data management software, and hardware products and services. Some industry participants also provide purpose-built servers for storing and accessing data over a shared network or the Internet. 4 Trends Shaping the Computer-Storage Industry's Future AI's Impact on Storage Devices Industry: Rapid proliferation of AI is overhauling the entire tech landscape. AI workloads like training large language models and running inference are driving demand for high-speed, high-capacity and low latency storage solutions. Traditional storage architectures are insufficient for the data throughput required by AI applications, prompting a transition toward NVMe-based SSDs (PCIe Gen 4/5/6), software-defined storage and storage class memory. Object storage is best suited for storing unstructured data, a common prerequisite for AI workloads. Other fast-emerging solutions include Parallel File Systems Optimized for AI and QLC NAND SSDs for AI Data Lakes. Innovation in Cloud Storage Technologies to Drive Adoption: Broader storage options from collocated hardware (such as hard disks and tape drives) to many cloud storage solutions have put the industry on a growth trajectory. Industry players are well-poised for growth, owing to a rapid increase in data, the complexity of data formats, and the need to scale resources at regular intervals. These companies rely on AI for IT Operations (AIOps) and machine learning to manage and optimize storage solutions. To streamline data storage, companies are relying on virtualization technologies. As more data is added from IoT, companies are turning to edge computing architecture to reduce latency and boost flexibility. Kubernetes storage is becoming increasingly popular as it facilitates greater agility and scalability. This has bolstered the deployment of high-capacity mass storage products, which is a positive for industry players. Increases in IT Spending Bode Well, but Macro Conditions Remain Concerns: Escalating trade tensions and tariffs are emerging as a key concern. These are weighing heavily on global macroeconomic conditions and can disrupt supply chain dynamics. Uncertainty in the macro backdrop and inflationary pressure could affect spending across small and medium-sized businesses globally. The uncertainty in business visibility could dent the industry's performance in the near term. However, optimism surrounding higher IT spending bodes well. Per a report from Gartner, worldwide IT spending is now projected to reach $5.61 trillion in 2025, indicating an increase of 9.8% from 2024 levels. The Devices segment is expected to grow 10.4% in 2025, mainly due to generative AI hardware upgrades, according to the report. Uncertainty Around PC Shipments: Worldwide PC shipments were up 4.9% year over year in the first quarter of 2025, per an IDC report. The research firm noted that the demand has witnessed a 'pull-in in the first quarter' owing to expectations of tariffs. However, IDC highlighted that the new tariffs could have a direct inflationary impact on the PC market. This could delay IT spending across the industry. The global recession also remains concerning despite the presence of tailwinds like demand for on-device AI PCs and installed base upgrades ahead of Windows 10 end of support, added the firm. Zacks Industry Rank Indicates Bright Prospects The Zacks Computer Storage is housed within the broader Zacks Computer and Technology Sector. It carries a Zacks Industry Rank #41, which places it in the top 17% of more than 244 Zacks industries. The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to we present a few stocks that you may want to consider for your portfolio, considering bright prospects, let us look at the industry's recent stock-market performance and valuation picture. Industry Underperforms S&P 500 and the Sector The Zacks Computer-Storage Devices industry has underperformed the S&P 500 composite and the broader sector in the past year. The industry has plummeted 32.4% in this period compared with the S&P 500's gain of 9.7%. The broader sector has gained 7.6% in the same time frame. One-Year Price Performance Industry's Current Valuation On the basis of forward 12-month P/E (or Price/Earnings), which is a commonly used multiple for valuing computer storage devices companies, we see that the industry is currently trading at 19.46X compared with the S&P 500's 21.89X. This is below the sector's forward 12-month P/E of 26.2X. In the past five years, the industry has traded as high as 194.54X and as low as 10.3X, with the median being 17.55X, as the charts below indicate. Forward 12-Month Price-to-Earnings (P/E) Ratio Forward 12-Month P/E Ratio3 Computer-Storage Devices to Add to Watchlist Western Digital: Headquartered in San Jose, CA, WDC is a leading developer and manufacturer of data storage devices and solutions based on NAND flash and hard disk drive technologies. Western Digital is gaining strength across its Cloud end-market amid ongoing geopolitical and macro turmoil. Despite the broader economic uncertainty, demand from its hyperscale customers remains strong amid supply constraints. To address these challenges, management is forming teams to reduce disruptions and planning long-term supply chain changes to stay flexible and strong. Rising AI uptake is likely to boost storage demand for both HDD and Flash, creating opportunities. It is working closely with two hyperscale customers on HAMR technology and has secured long-term deals through mid-2026. Strong data center demand is likely to drive sales in the fiscal fourth quarter. However, it expects slight sequential operating expense growth to $330-$340 million, driven by variable pay, key hires and higher R&D investment stemming from the SanDisk separation. Currently, WDC sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. The Zacks Consensus Estimate for fiscal 2025 earnings has remained unchanged at $4.73 per share in the past seven days. The stock has plummeted 21.5% in the past year. Price and Consensus: WDC Teradata: TDC is a leading provider of connected multi-cloud data platforms. It has evolved from an enterprise database company to an enterprise analytics platform provider. TDC's AI and hybrid cloud innovations bode well. The recently launched Enterprise Vector Store, integrated with NVIDIA's NeMo Retriever, supports agentic AI and retrieval-augmented generation applications. TDC's advanced AI solutions, particularly in Customer Experience AI, are in high demand as businesses prioritize data-driven insights. Moreover, Teradata has established partnerships with the top three global public cloud service providers: AWS, Microsoft Azure and Google Cloud. These partnerships are helping Teradata to provide companies around the globe access to its VantageCloud. In May 2025, Teradata partnered with Fivetran to automate data pipelines from more than 700 sources into VantageCloud. This will aid in reducing data migration costs, streamline operations and boost business insights. Currently, TDC carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2025 earnings has remained at $2.16 per share in the past seven days. The stock has declined 37.4% in the past year. Price and Consensus: TDC NetApp: Headquartered in San Jose, CA, NetApp is a leading provider of enterprise storage, data management software, and hardware products and services. NetApp is witnessing higher demand from customers for its portfolio of modern all-flash arrays, especially the C-series capacity flash and ASA block-optimized flash. The new all-flash A-series is also picking up momentum. These enterprise storage products will allow users to boost workloads, including traditional enterprise applications and Gen AI. The company expects the new AFF A-series, along with its C-series and ASA products, to capture further share in the all-flash market. Strength in Keystone-as-a-service offering is aiding its RPO. Solid momentum in hyperscaler first-party and marketplace storage services has been driving revenues from the Public Cloud. Demand for AI solutions remains strong, with five-fold year-over-year growth for AI business reported in the fiscal fourth quarter of 2025. Management remains wary as it initiated the fiscal 2026 outlook. It highlighted mixed signals for the global macroeconomic outlook, reflecting a slowdown in growth, lingering inflation concerns and a significantly higher uncertainty. It expects increases in spending caution and ongoing friction in the U.S. Public Sector and the EMEA. Fiscal 2026 revenues are forecast to be $6.625-$6.875 billion, up 3% year over year at the mid-point. Currently, NTAP carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for fiscal 2026 earnings stood at $7.72 per share, up 1 cent in the past seven days. The stock is down 18.3% in the past year. Price and Consensus: NTAP Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Western Digital Corporation (WDC) : Free Stock Analysis Report NetApp, Inc. (NTAP) : Free Stock Analysis Report Teradata Corporation (TDC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
15-05-2025
- Business
- Yahoo
Western Digital, Ingrasys Partner for Next-Gen Fabric-Attached Storage
Western Digital Corporation WDC recently teamed up with Ingrasys, a subsidiary of Foxconn Technology Group, to transform the way storage and networking are deployed at scale. The initiative aims to engineer a Top-of-Rack (TOR) Ethernet Bunch of Flash (EBOF) switch with embedded storage—a new frontier in fabric-attached, disaggregated infrastructure designed to meet the surging data demands of AI and high-performance state-of-the-art TOR EBOF switch integrates Western Digital's RapidFlex NVMe-oF bridge technology directly into a high-performance TOR switch. This convergence eliminates the need for separate storage networks, minimizes data movement latency and offers greater flexibility and scalability. Per the agreement, the TOR switch will be manufactured by Ingrasys, leveraging its expertise in high-density, GPU-optimized systems, while WDC will lead the architecture and go-to-market efforts, with a vision to make NVMe-oF disaggregated storage mainstream among cloud service providers (CSPs) and storage OEMs. The next-generation TOR switch from Ingrasys is expected to hit the market in 2027, featuring top-notch design and performance. At the core of the embedded storage architecture is WDC's RapidFlex, offering 100G Ethernet connectivity and support for NVMe/PCIe Gen6 E3.S/L SSDs. The switch leverages NVIDIA's Spectrum-4 ASIC, ensuring best-in-class switching performance and ultra-low latency. Offering flexible 400GbE and 800GbE cabling, the switch is designed for emerging hyperscale and enterprise data center NVMe-oF fabric bridge is an innovative solution for fabric-attached storage, designed for modern data centers. It stands out as the only NVMe-oF bridge that relies heavily on hardware acceleration and eliminates firmware from the data path. This enables I/O read and write operations to pass through the adapter with very low latency via direct Ethernet. This unique design supports smooth, high-speed integration of NVMe SSDs into disaggregated systems, allowing storage to scale independently from computing generative AI, real-time analytics and high-throughput data applications become central to business operations, data center operators are under constant pressure to innovate. This flagship initiative is likely to become a key catalyst in next-generation data center design, aligning with trends like edge computing, data locality, GPU-driven workloads and software-defined infrastructure. The company expects the growing use of generative AI to drive a refresh cycle in client and consumer devices, boosting content growth in smartphones, gaming, PCs and more. Gen AI adoption jumped from 33% in 2023 to 65% in 2024, increasing storage demand for both HDDs and Flash. High-bandwidth memory is key for AI servers, while NAND flash powers SSDs for storing text, images and video. As AI data grows, eSSD sales rise due to their speed, reliability, and efficiency, helping reshape the storage ongoing macroeconomic volatility and uncertainty caused by the damaging impact of levying tariffs and escalating global trade conflicts remain concerns for management in the near term, as these are likely to create demand fluctuations in areas such as the enterprise segment and parts of its distribution and retail business. Despite the broader uncertainty in the environment, demand from its hyperscale customers remains strong amid a constrained supply February 2025, Western Digital completed the separation of its HDD and Flash businesses into two independent, publicly traded companies, each with a specific focus on its respective market. With a deep understanding of memory and storage technology, the new SanDisk is ready to meet market demands. It is well-equipped to take advantage of AI opportunities while maximizing the value of its products for both consumers and businesses. WDC currently carries a Zacks Rank #5 (Strong Sell). Shares of the company have lost 33.6% in the past year compared with the Computer- Storage Devices industry's decline of 31.7%. Image Source: Zacks Investment Research Some better-ranked stocks from the broader technology space are Juniper Networks, Inc. JNPR, InterDigital, Inc. IDCC and Ubiquiti Inc. UI. JNPR presently sport a Zacks Rank #1(Strong Buy), while IDCC & UI carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators. In the last reported quarter, it delivered an earnings surprise of 4.88%.IDCC is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. It has a long-term growth expectation of 15%.Ubiquiti's effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 33.3%. Its highly flexible global business model remains well-suited to adapt to the changing market dynamics to overcome challenges while maximizing growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Western Digital Corporation (WDC) : Free Stock Analysis Report Juniper Networks, Inc. (JNPR) : Free Stock Analysis Report InterDigital, Inc. (IDCC) : Free Stock Analysis Report Ubiquiti Inc. (UI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
