3 Data Memory Stocks Beating NVDA This Year

Memory storage companies are significantly outperforming in the AI bull market, driven by the immense data demands of AI, a cyclical recovery in memory prices, and investor rotation into "picks and shovels" plays. Western Digital (WDC) is up 170% YTD following its Sandisk spinoff, while Sandisk (SNDK) surged 480% in three months on strong Q1 2026 earnings and order backlogs extending to 2026-2027. Pure Storage (PSTG) also shows strong momentum, up 46% YTD, bolstered by its recurring revenue model and key AI clients, underscoring the sector's critical role in scaling AI infrastructure.

Analysis

The artificial intelligence revolution is driving a significant "picks and shovels" bull market in memory storage, which is currently outperforming hyperscalers and semiconductor stocks. This surge is fueled by the immense data storage demands for training large language models (LLMs) and a cyclical resurgence in memory device prices as a post-pandemic supply glut dissipates. Investor rotation into data storage also reflects a search for more attractive valuations compared to stretched large-cap tech.

Western Digital (WDC) has seen shares climb over 170% YTD, including a 115% rally in the last three months, following its successful Sandisk spinoff. The company benefits from cost-efficient HDD demand from AI hyperscalers, with detailed purchase orders extending through 2026 and into 2027. Sandisk (SNDK) surged an astonishing 480% in three months, driven by strong Q1 2026 earnings that nearly doubled analyst EPS expectations and 22% YOY revenue growth to $2.31 billion.

Sandisk's order book is filled through 2026, with higher margins expected from price hikes, though its Relative Strength Index (RSI) above 70 signals potential for a short-term pullback. Pure Storage (PSTG), up 46% YTD, demonstrates strong 18% annual recurring revenue growth through its subscription model, serving key AI clients like Meta and NVIDIA. A Golden Cross preceded its last earnings, which saw a 32% stock jump after exceptional results, with shares now retesting the 50-day SMA.

Key Decisions for Investors

• Investors should consider increasing exposure to memory storage companies, particularly those with strong order backlogs and recurring revenue models, given their critical role in scaling AI infrastructure and favorable market dynamics.
• Monitor cyclical trends in memory pricing and supply-demand balances, as well as company-specific technical indicators like RSI for potential short-term pullbacks, especially for high-flying stocks like Sandisk.
• Evaluate companies like Pure Storage for their subscription-based models, which offer revenue stability and growth potential, and assess Western Digital's post-spinoff efficiency and cost-effective HDD solutions for hyperscaler demand.