In this article, we look at the 7 Best Data Storage Stocks To Buy Now.
The Future of Data Storage
Data storage refers to the systematic process of archiving digital information, ensuring its availability and security for future use. This process involves various storage methods, including direct attached storage, storage area networks, network attached storage, and software-defined storage, to maintain data in multiple formats such as text, images, and videos. Storage technologies range from traditional physical devices, like hard drives, to cloud-based solutions that offer scalability and accessibility from anywhere with an internet connection.
According to a report by Fortune Business Insights, the global data storage market was valued at $218.33 billion in 2024 and is expected to grow to $774.00 billion by 2032, with a CAGR of 17.1% during the forecast period. North America is the largest data storage market and contributed $78.98 billion to the market in 2023. A key factor contributing to market growth in the region is the increasing number of data centers. The COVID-19 pandemic has intensified the demand for storage and processing power as businesses strive to remain agile and responsive. At the same time, data centers are increasingly relying on cloud providers for their storage and processing needs, further boosting market growth in the region.
Generative AI has also played a key role in the growth of the data storage market, bringing transformative changes to data creation, processing, and storage needs. Advanced machine learning models, like GPT-3, can produce vast amounts of diverse and complex data. This increase in data generation has necessitated a reevaluation of storage architectures to accommodate the heightened volume, variety, and speed of the content being generated. Industries including entertainment, e-commerce, finance, healthcare, and manufacturing are all contributing to this surge in data production.
In a CNBC interview on May 30, Charlie Giancarlo, CEO of Pure Storage, talked about the current trends and challenges in the data storage industry and particularly focused on how artificial intelligence (AI) is influencing storage demand. Giancarlo highlighted three key areas where AI impacts storage: the need for storage to train AI models, using AI models on existing data, and upgrading existing data environments to be AI-ready. He emphasized that while AI investments may pressure other parts of tech budgets, data storage will remain a critical area that will likely continue to see investment.
According to IDC, the global storage needs were estimated at 33 billion terabytes in 2018 and this number is projected to reach 175 billion terabytes by 2025. The growing demand for data storage has led to the development of innovative, secure, and cost-effective solutions. Cloud storage has become a central element in modern data management. The adoption of big data and IoT is expected to further drive cloud storage growth. SSD technology, enhanced by data reduction techniques such as compression and deduplication helps maximize storage efficiency, making it ideal for large-scale data management. Manufacturers are introducing 3D NAND technology in storage devices. NAND is a type of non-volatile storage technology that does not require power. 3D NAND technology stacks cells vertically which allows greater capacity and reliability. While the technology offers significant benefits, such as increased storage density and reduced interference, it also comes with higher manufacturing costs.
Other emerging technologies like DNA data storage and object storage are also increasing capacity and reliability. DNA storage technology uses synthesized strands of DNA to encode and decode binary data and store up to 215,000 terabytes of data. Although still in development, DNA storage could become a viable option for critical data preservation in the future. Object storage offers a scalable and cost-effective solution for managing unstructured data by storing data as individual objects. This technology allows for quick retrieval and seamless data sharing across multiple platforms. As big data and IoT continue to grow, object storage will become increasingly essential for businesses needing to manage large volumes of data efficiently. Manufacturing companies are also implementing data security using encryption, blockchain, and AI, which safeguard data and automate threat detection.
As the digital landscape expands, innovative solutions like cloud storage, SSD optimizations, enhanced data security, AI-driven management, DNA storage, and 3D NAND will play crucial roles in meeting the growing demand for data storage solutions. With that in context, let’s take a look at the 7 best data storage stocks to buy now.
A data center filled with the latest servers and networking equipment representing the company’s cutting edge security infrastructure.
Our Methodology
We used cloud computing and data storage ETFs plus online rankings to compile an initial list of the best data storage stocks to buy now. We narrowed our list to the 7 stocks that analysts see the most upside to. The list is sorted in ascending order of analysts’ average upside potential, as of August 12. Note: We only included companies whose primary business is in the data storage industry.
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7 Best Data Storage Stocks To Buy Now
7. Box (NYSE:BOX)
Upside Potential: 7.85%
Average Analyst Price Estimate: $29.67
Box (NYSE:BOX) is a central platform and cloud content management tool that is used for cloud storage, file sharing, syncing, e-signatures, and collaboration among organizations to manage, share, and transfer digital content securely. Box (NYSE:BOX) has over 100,000 clients and almost 68% of them are Fortune 500 companies. The company is well-positioned to leverage its expanding product portfolio and strong market position to drive significant growth. Despite facing intense competition and market volatility, Box (NYSE:BOX) is one of the best data storage stocks to buy for the long-term.
As Box (NYSE:BOX) introduces multiple products, integrates new AI models, expands its AI capabilities for enterprise-level customization, and utilizes it for multi-document analysis, the adoption of its software is likely to accelerate further. On June 27, Box (NYSE:BOX) announced enhancements to Box AI, which is expected to significantly boost the adoption of its Enterprise Plus platform. Additionally, management is focusing on achieving FedRAMP compliance to enhance integration with external security vendors, which will increase consumer confidence in its products. Box Sign is another product by the company that allows users to request and apply electronic signatures online. Both products help the company in cross-selling its products and over two-thirds of new subscriptions come from cross-selling. The company’s emphasis on security and advanced capabilities sets it apart from competitors such as Dropbox (NASDAQ:DBX).
For the three months ended on April 30, Box (NYSE:BOX) reported that its revenue grew 5% year-over-year to $264.7 million, surpassing Wall Street’s expectations. Constant-currency growth rates were even stronger at 8% year-over-year. The company’s performance is strengthened by its Suite offerings, which now constitute 56% of total revenue. The company has also improved its operating margin by 1% compared to the previous year. Box (NYSE:BOX) is expected to grow its earnings by 7.26% this year. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $29.67, which represents a 7.85% upside potential from its current level.
6. Equinix (NASDAQ:EQIX)
Upside Potential: 10.81%
Average Analyst Price Estimate: $907.36
Equinix (NASDAQ:EQIX) is the largest pure-play data center REIT in the United States. The company serves over 10,000 companies and helps them securely interconnect with their partners, customers, and employees. Equinix (NASDAQ:EQIX) owns and operates a network of 260 data storage centers in over 33 countries on six continents around the world. With a market share of 40-50% among key cloud providers, Equinix (NASDAQ:EQIX) has established itself as a dominant player in the data storage sector. This strong market position is likely to drive continued revenue growth, particularly as global data storage needs expand.
By operating in multiple regions, Equinix (NASDAQ:EQIX) ensures proximity to end-users, which enhances data access speeds and meets local regulatory requirements. This proximity is vital for cloud providers and enterprises that need reliable, fast, and compliant data storage solutions. Instead of acquiring or building new facilities Equinix (NASDAQ:EQIX) has employed a blend of leased properties and joint ventures (JVs) under its ‘Xscale’ initiative, which allows Equinix (NASDAQ:EQIX) to rapidly expand its global footprint without investing a lot of capital and ensures long-term sustainability and growth.
Equinix (NASDAQ:EQIX) has a net debt leverage ratio of 3.6x and a weighted average debt maturity of 7.3 years. Additionally, 96% of its debt is fixed-rate which insulates the company from interest rate volatility. Equinix (NASDAQ:EQIX) has demonstrated remarkable stability in its financial performance with 85 consecutive quarters of top-line growth and consistent profitability on both EBITDA and AFFO (Adjusted Funds From Operations) metrics.
Equinix (NASDAQ:EQIX) is strategically positioned to capitalize on the growing global demand for data storage. Its strong market position, consistent growth, and superior scale make it a compelling investment. The stock is trading at $818.88 as of August 12. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $907.36, which represents a 10.81% upside potential from its current level.
5. Dropbox (NASDAQ:DBX)
Upside Potential: 19.56%
Average Analyst Price Estimate: $26.83
Dropbox (NASDAQ:DBX) is a leading file-hosting, cloud storage, and collaboration platform that helps organizations share documents, and files securely over the internet. The company has positioned itself as a key player in the digital workspace industry and has expanded its offerings to various productivity tools. As of December 31, 2023, Dropbox (NASDAQ:DBX) has 18.12 million paid subscribers. Dropbox (NASDAQ:DBX) is positioned as an attractive investment opportunity within the tech sector, the stock is trading at 10.02 times this year’s earnings estimate, a 56% discount to its sector. Analysts expect earnings to grow by 11.42% this year.
The launch of AI-driven products, such as Dropbox Dash, represents a significant growth avenue for Dropbox (NASDAQ:DBX). By integrating AI to enhance user experience and productivity, the company is well-positioned to capture additional market share in the enterprise segment. The company is also making strategic moves to accelerate growth. Management has initiated marketing campaigns and launched a refreshed web design to boost the visibility of products. This approach is aimed at driving upsell and cross-sell opportunities through bundled offerings which will be easier for customers to discover and utilize.
The company is on the verge of reaching its $1 billion free cash flow target for 2024, showcasing its resilience and strong ability to forecast future performance. With over $759 million in free cash flow against an $8.1 billion equity and no net debt, Dropbox (NASDAQ:DBX) presents an attractive 9.2% earnings yield. This consistent recurring revenue and robust cash flow make Dropbox a compelling stock to buy now. The stock is trading at $22.44 as of August 12. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $26.83, which represents a 19.56% upside potential from its current level.
4. Seagate Technology (NASDAQ:STX)
Upside Potential: 21.87%
Average Analyst Price Estimate: $117.34
Seagate Technology (NASDAQ:STX) is a global leader in data storage solutions. The company designs and manufactures a broad range of hard disk drives (HDDs), solid-state drives (SSDs) external storage devices, and network-attached storage drives which are used in computers, laptops, and mass-capacity data centers. The SSD market is valued at $65.47 billion in 2024 and is anticipated to grow to USD 147.01 billion by 2029, with a CAGR of 17.56% (according to estimates by Mordor Intelligence). Seagate Technology (NASDAQ:STX) is well-positioned for success as the global SSD market expands.
For the three months ended on June 28, Seagate Technology (NASDAQ:STX) reported that its revenue increased 18% year over year to $1.88 billion, beating analysts’ forecast of $1.85 billion. Earnings increased by 23% due to the increase in gross margins and operating margins. The company reported a gross margin of 31.8%, a notable improvement from 22.7% compared to the same quarter in the previous year. Seagate Technology (NASDAQ:STX) is experiencing strong demand from the global cloud market due to the growth of AI-related technologies, particularly generative AI.
Seagate Technology’s (NASDAQ:STX) cost-effective and scalable storage solutions are expected to remain in high demand, further boosting cash generation. The company increased its total cash position by 78% from $786 million to $1.4 billion, year over year, and reduced its debt, from $5.8 billion a year ago to $5.7 billion. While Seagate Technology’s (NASDAQ:STX) total liabilities still exceed total assets, the company is projected to grow at a fast pace, due to the cloud and AI sectors.
The company’s next-generation Heat-Assisted Magnetic Recording (HAMR) technology is also viewed as a significant breakthrough in the data storage market. This technology enables higher data density, reduces energy consumption, and increases disk capacity. Management anticipates that the launch of HAMR products in fiscal year 2025 could initiate a new spending cycle for customers seeking upgrades. Analysts expect that the company will increase its earnings by 136.84% this year. As a result, Seagate Technology (NASDAQ:STX) offers a compelling investment opportunity. The stock is trading at $96.28 as of August 12. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $117.34, which represents a 21.87% upside potential from its current level.
3. Pure Storage (NYSE:PSTG)
Upside Potential: 24.68%
Average Analyst Price Estimate: $70.67
Pure Storage (NYSE:PSTG) is an enterprise data storage and management company that provides high-performance data storage hardware and software products such as flash memory, storage as a service, and a data management platform that is widely used around the world. Pure Storage (NYSE:PSTG) has made significant contributions to the data storage industry and is known for using flash memory over traditional Hard Disk Drives (HDDs) that offer high data retrieval speed, which is critical in Big Data analytics, AI, and High-Performance Computing (HPC).
As enterprises increasingly recognize the limitations of HDDs, especially in AI-driven workloads, the shift to all-flash storage solutions is inevitable. Pure Storage is perfectly positioned to capitalize on this trend, with its advanced DirectFlash technology which offers significant efficiency and performance advantages. Pure Storage’s (NYSE:PSTG) products, such as FlashArray and FlashBlade, are designed to provide the speed and capacity required to handle massive amounts of unstructured data in AI applications. Pure Storage (NYSE:PSTG) forecasts that nearly all new data center storage solutions will be flash-based by 2028 and the company is set to benefit from a strong demand in the transition from HDDs.
Hybrid Cloud market is another significant growth driver for Pure Storage (NYSE:PSTG). The company’s cloud-focused offerings, including Cloud Block Store and Pure Fusion, are designed to provide enterprises with the tools needed to manage their data across multiple environments effectively. The company’s emphasis on hybrid cloud solutions positions it to capture a significant share of this rapidly growing market. Hybrid Cloud solutions market was valued at $129.68 billion in 2024 and is expected to reach $352.28 billion by 2029, growing at a CAGR of 22.12% (according to data by Mordor Intelligence). The company’s Evergreen storage subscription services provide customers with a flexible storage solution without the need for hardware replacements and non-disruptive software upgrades. The service not only strengthens customer loyalty but also creates a recurring revenue stream for Pure Storage (NYSE:PSTG).
Pure Storage (NYSE:PSTG) is at the forefront of a technological revolution in data storage, with its all-flash solutions, hybrid cloud capabilities, and subscription services. The company is well-positioned to lead the industry and deliver strong financial performance in the upcoming years. The company is expected to grow its earnings by almost 12% this year. The stock is trading at $56.68 as of August 12. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $70.67, which represents a 24.68% upside potential from its current level.
2. Western Digital (NASDAQ:WDC)
Upside Potential: 53.42%
Average Analyst Price Estimate: $91.56
Western Digital (NASDAQ:WDC) is a leading data storage solutions provider and offers a broad range of products, including hard disk drives (HDDs), solid-state drives (SSDs), and cloud storage services. The company has been a key player in the digital storage market and serves both consumer and enterprise customers.
Western Digital (NASDAQ:WDC) presents a compelling investment opportunity, particularly in the wake of the recent chip market sell-off. The current dip in its share price offers a chance to buy into a company well-positioned to capitalize on the AI supercycle, which is expected to drive sustained demand for memory chips. This long-term trend, fueled by both enterprise investments and growing consumer demand, is anticipated to push memory prices upward, benefiting Western Digital (NASDAQ:WDC) significantly.
One of the key strengths of Western Digital (NASDAQ:WDC) is its improving gross margin which has reached multi-year highs due to strong memory pricing. This margin expansion is directly contributing to the company and making it a more attractive investment. Furthermore, Western Digital’s (NASDAQ:WDC) substantial debt reduction efforts are noteworthy. Historically burdened by significant debt, the company has used its recent profits to pay down its obligations. Another strategic move that makes it an attractive investment is the planned spin-off of Western Digital’s (NASDAQ:WDC) flash unit, currently a joint venture with Kioxia.
In FQ4 2024, Western Digital’s (NASDAQ:WDC) revenue grew by 41% year over year to $3.76 billion, surpassing expectations of $3.74 billion. The cloud segment revenue increased by 89% year over year to $1.88 billion, which is half of the company’s total revenue. Analysts expect the company to grow its earnings by over 100% this year. The stock is trading at $59.68 as of August 12. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $91.56, which represents a 53.42% upside potential from its current level.
1. Micron Technology (NASDAQ:MU)
Upside Potential: 86.66%
Average Analyst Price Estimate: $173.74
Micron Technology (NASDAQ:MU) designs, develops, manufactures, and sells a wide range of memory and storage chips, including DRAM, NAND flash, and solid-state drives (SSDs) to major technology companies such as Microsoft, Apple, Dell, IBM, Nvidia, HP, Lenovo, and Samsung along with automotive manufacturers, telecom providers, government agencies, and research institutions globally.
Micron Technology (NASDAQ:MU) produces the world’s best high-bandwidth memory (HBM) storage devices for data centers that enhance GPU performance by fast storing and data processing. The new HBM3E architecture chips developed by Micron Technology (NASDAQ:MU) deliver better performance, have a smaller physical size, and use 30% less energy than competing products compared to memory generations, making it more cost-effective for data center operators.
In its second quarter investor letter, the ClearBridge Value Equity Strategy stated the following regarding Micron Technology, Inc. (NASDAQ:MU):
“Stock selection in the IT sector proved to be the largest contributor to performance, particularly driven by the strong performance of Micron Technology, Inc. (NASDAQ:MU) The company, which designs, develops, manufactures and sells memory and storage products, continued its strong performance alongside other AI beneficiaries as the anticipated demand for new and additional storage essential for housing and training large language AI models continues to grow.”
For the three months ended on May 30, Micron Technology (NASDAQ:MU) generated a revenue of $6.81 billion, up 82% compared to the same quarter in the previous year and surpassing expectations by $140 million. The company reported earnings of $0.62 per share, beating estimates by $0.09. Looking ahead, Micron Technology’s (NASDAQ:MU) next quarter earnings are forecasted to reach $1.08 per share, with revenues projected at $7.6 billion, reflecting continued strong demand.
As Micron Technology (NASDAQ:MU) continues to innovate and expand its product portfolio, particularly in high-growth areas like AI, the company is well-positioned to achieve its ambitious revenue of $25 billion in the financial year 2024, representing a 61% year-over-year increase. The stock is trading at $93.08 as of August 12. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $173.74, which represents an 86.66% upside potential from its current level.
While we acknowledge the potential of Micron Technology, Inc. (NASDAQ:MU) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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