By Zaheer Kachwala
April 29 (Reuters) – Shares of data-storage companies jumped in premarket trading on Wednesday, a day after strong revenue and profit forecasts from Seagate Technology signaled that spending by enterprises on artificial intelligence equipment will remain strong.
Seagate’s strong forecast and the surge in storage stocks underscore investor confidence that enterprise AI spending will sustain demand for data-storage equipment despite broader market concerns about the pace of AI adoption.
Companies have funneled increasing amounts of money into data drives, hard disks and other digital storage as they rushed to upgrade their artificial intelligence models and infrastructure.
Shares of Seagate soared nearly 18%, while Western Digital jumped 9.5%, Micron Technology climbed about 3% and SanDisk rose nearly 5%.
If gains hold, the four storage technology companies are set to add about $42 billion in combined market value.
“AI is amplifying demand across existing applications such as video, where large cloud providers are integrating AI in the platforms to boost user engagement and revenue opportunities, driving new video creation and the need to store it,” said Seagate CEO Dave Mosley on a post-earnings conference call.
Analysts at Morningstar said the AI buildout is likely to give hard disk drive makers stronger pricing power through at least 2030, and potentially longer, which could further lift valuations.
Seagate, whose shares have already more than doubled so far this year, forecast fourth-quarter revenue of $3.45 billion, plus or minus $100 million, beating estimates of $3.16 billion, according to data compiled by LSEG.
Executives at Seagate and rival Western Digital have previously said their capacity has been fully allocated and sold out through calendar 2026.
In Tuesday’s trading session, the Nasdaq fell almost 1%, hurt by concerns about the AI boom after a report said OpenAI had fallen short of its goals for new users and revenue in recent months.
Nasdaq futures rose 0.2%, showing that traders expect tech stocks to partly rebound in Wednesday’s session.
The rise in storage demand also comes alongside a surge in memory prices, as power-hungry data centers use a significant portion of high-bandwidth memory to store and process massive amounts of information.
The shortage of memory chips has left companies scrambling to find hardware that can aid their AI efforts and store data, benefiting companies such as Seagate that make physical hard drives.
(Reporting by Zaheer Kachwala in Bengaluru; additional reporting by Kanishka Ajmera in Bengaluru and Noel Randewich; Editing by Sriraj Kalluvila)
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