Walking down memory lane

The hottest stocks of 2025 are also the hottest stocks of 2026, with hard drive makers emerging as the newest winners of the AI trade.

Sandisk, Western Digital, and Seagate Technology jumped 388%, 219%, and 189% last year, respectively, as investors piled into data storage names tied to the AI buildout. All three have already posted double-digit gains in 2026—Sandisk in particular has been red-hot, soaring 74.24% while the S&P 500 has climbed just 1.38%.

Memory mayhem

Those massive gains reflect a sharp imbalance between supply and demand: Memory is a critical input for training and running AI models built on chips from Nvidia and AMD, yet production has struggled to keep pace with the surge in AI infrastructure spending. “Your performance is limited by the amount of memory and the speed of the memory that you have, and if you keep adding more GPUs, it’s not a win,” Sha Rabii, co-founder of Majestic Labs, told CNBC.

Not every company in the tech industry is enjoying the party, though. For consumer electronics makers such as Apple and Dell Technologies, rising memory prices are becoming a meaningful cost headwind: Memory now accounts for about 20% of a laptop’s hardware costs, up from roughly 10% to 18% earlier in 2025, leaving companies with a familiar choice: Eat the cost and watch margins shrink, or raise prices and hope consumers don’t notice (they usually notice).

Beyond the boom

The data storage industry has a history of sharp cycles, yet some investors believe the rally will continue through 2026. In fact, one well-known figure in the AI industry just bet millions on it.

Mark Liu, who previously held a senior role at Taiwan Semiconductor Manufacturing Company and now sits on Micron Technology’s board, just purchased 23,200 shares of Micron worth $7.8 million.

Micron has emerged as one of the biggest names in flash memory chip manufacturing, sparking a 218% return in 2025, and a 27.1% gain year to date. The fact that Liu is willing to buy so many shares of the company after they’ve run so high lately indicates just how confident he is that Micron has more room to rally.—SY