We recently compiled a list of the 10 Best Data Storage Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where Seagate Technology Holdings (NASDAQ:STX) stands against the other data storage stocks.
Data storage involves systematically archiving digital information to ensure its availability and security for future use. This encompasses various methods, including direct attached storage, network attached storage, and cloud-based solutions. The rise of GenAI has significantly impacted the data storage landscape, necessitating new architectures to handle the growing volume and complexity of data generated. Innovations such as cloud storage, SSD technology, and emerging solutions like DNA data storage are shaping the future of data management.
The next-generation data storage market is projected to grow from $65.1 billion in 2024 to $90 billion by 2029, exhibiting a compound annual growth rate of 6.7%, according to MarketsandMarkets. This is attributed to the increasing demand for energy-efficient and compact storage solutions, the rising adoption of NVMe technology in enterprise systems, and the expanding use of 5G technology. North America held the largest share of the market in 2023, accounting for 43.4%, largely due to heightened demand from sectors such as banking, financial services, insurance (BFSI), and healthcare.
High-speed storage solutions enable organizations to process large datasets quickly, which accelerates model training and enhances analytical effectiveness. Real-time data processing is another critical application of next-generation storage. By integrating AI with advanced storage systems, organizations can perform immediate analysis essential for sectors like finance, where fraud detection and predictive maintenance are paramount. Storage Area Networks (SANs) optimize throughput and minimize latency, making them ideal for mission-critical applications.
AI-driven technologies can detect anomalies and potential threats in real-time, providing essential protection against cyber threats as data breaches become more common. Next-generation storage systems also support the growing Internet of Things (IoT) by efficiently managing the vast amounts of data generated by connected devices. Many of these systems also integrate seamlessly with cloud services, allowing businesses to leverage scalable storage options while utilizing AI for improved performance.
As the market adapts to these opportunities, we are here to help you find the 10 best data storage stocks to buy according to hedge funds.
Methodology
We sifted through ETFs, online rankings, and internet lists to compile a list of the top data storage stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician configuring a network-attached storage drive.
Seagate Technology Holdings (NASDAQ:STX)
Number of Hedge Fund Holders: 46
Seagate Technology Holdings (NASDAQ:STX) is a global provider of data storage solutions and specializes in hard disk drives (HDDs), and solid-state drives (SSDs) among other storage devices. It serves a diverse customer base, including original equipment manufacturers, distributors, and retailers.
Revenue for the company surged nearly 50% year-over-year in FQ1 2025, due to a high demand for nearline drives, which are HDDs designed for storing large amounts of data that is not accessed frequently, from major cloud service providers, particularly in the US. The increasing reliance on cloud services has fueled the need for massive storage capacity. HDDs continue to dominate the public cloud storage market, accounting for ~90% of stored bytes.
It expects continued growth in cloud demand, driven by factors such as the increasing adoption of data-intensive applications, the rise of GenAI, and the ongoing expansion of video content consumption. Seagate Technology Holdings (NASDAQ:STX) is well-positioned to capitalize on this growth with its high-capacity nearline drives and innovative technologies like HAMR (Heat-Assisted Magnetic Recording). Its focus on addressing the needs of cloud providers positions it for continued success in the data storage market.
Overall STX ranks 4th on our list of the best data storage stocks to buy according to hedge funds. While we acknowledge the potential of STX as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than STX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
