The boom in artificial intelligence (AI) has led to persistent demand for NVIDIA Corporation<\/strong>\u2019s (NVDA Quick QuoteNVDA<\/a> – Free Report<\/a>) state-of-the-art AI hardware, including graphics processing units and Blackwell chips. That demand propelled NVIDIA to become the world\u2019s most valuable company, with a market capitalization of over $4 trillion, and its stock has delivered strong returns over the past few years.\u00a0\u00a0<\/p>\n However, NVIDIA\u2019s growth has led to the company trading at a premium in comparison to most of the other semiconductor players, leaving little room for disappointment if growth derails. A slowdown in AI infrastructure spending by hyperscale cloud providers could impact NVIDIA\u2019s revenue and earnings growth, while competition from rivals like Advanced Micro Devices, Inc.<\/strong> (AMD Quick QuoteAMD<\/a> – Free Report<\/a>) continues to increase.\u00a0\u00a0<\/p>\n At the same time, U.S. export curbs on cutting-edge AI chips to China have constrained NVIDIA\u2019s entry to a key market, potentially pressuring its margins. Additionally, NVIDIA remains exposed to supply-chain disruptions due to its dependency on Taiwan Semiconductor Manufacturing Company Limited<\/strong> (TSM Quick QuoteTSM<\/a> – Free Report<\/a>) for advanced chip production amid ongoing geopolitical tensions.\u00a0<\/p>\n Given these challenges, it\u2019s becoming increasingly difficult for NVIDIA to meet sky-high expectations. Thus, investors seeking AI exposure should look for much smaller companies with greater room for expansion. Notable among them are Western Digital Corporation <\/strong>(WDC Quick QuoteWDC<\/a> – Free Report<\/a>) and Seagate Technology Holdings plc<\/strong> (STX Quick QuoteSTX<\/a> – Free Report<\/a>) , whose shares have soared 662.8% and 464.5%, respectively, over the past year, outpacing NVIDIA\u2019s gain of 22.6%.\u00a0<\/p>\n Both Western Digital and Seagate stand to gain from the rapid growth in AI-driven demand for data storage. Let\u2019s take a closer look at the key catalysts that could drive further upside in these AI stocks \u2013\u00a0\u00a0<\/p>\n Western Digital\u2019s AI Storage Boom Could Drive Further Upside\u00a0<\/p>\n Rising demand for high-value enterprise hard disk drives and a favorable pricing environment have created a solid growth runway for Western Digital. The company\u2019s revenues totaled $3.34 billion in the fiscal third quarter of 2026, up 45% year over year, according to the company\u2019s press release<\/a>.<\/p>\n Furthermore, the company expects revenues for the fiscal fourth quarter of 2026 to be about $3.65 billion, plus or minus $100 million. The upbeat guidance reflects robust demand for AI infrastructure, with cloud providers and enterprise customers continuing to invest in high-capacity storage to meet increasing AI workloads.\u00a0<\/p>\n In the fiscal third quarter, Western Digital\u2019s non-GAAP gross margin rose to 50.5% from 40.1% in the prior-year period. The company projects further margin expansion, with fiscal fourth-quarter non-GAAP gross margin expected to reach 51-52%. The improving gross margin is providing Western Digital with greater financial flexibility to invest in research and development, enhance earnings growth and create long-term value for shareholders.\u00a0<\/p>\n As a result, the company\u2019s expected earnings growth rate for the current year is 104.1%. The Zacks Consensus Estimate of $10.06 for WDC\u2019s earnings per share (EPS) is up 54.8% year over year.<\/p>\n Image Source: Zacks Investment Research<\/p>\n Seagate\u2019s AI Infrastructure Play Gains Momentum Amid Rising Demand\u00a0<\/p>\n Seagate is well-positioned to sustain its growth momentum, banking on rising data-center storage demand, expanding margins, and robust cash flows. These favorable trends could provide the required upside for Seagate\u2019s shares, strengthening its position as a potential beneficiary of the AI infrastructure boom.\u00a0<\/p>\n For the fiscal fourth quarter of 2026, Seagate expects revenues of around $3.45 billion, plus or minus $100 million, more than the $3.11 billion reported in the fiscal third quarter of 2026, according to investors.seagate.com<\/a>.\u00a0 \u00a0<\/p>\n Moreover, a non-GAAP gross margin of 47% in the fiscal third quarter reflected improved operational execution and enhanced profitability. Additionally, the company\u2019s free cash flow of $953 million in the fiscal third quarter showcased the strength in its core business.\u00a0\u00a0<\/p>\n Supported by these trends, Seagate\u2019s expected earnings growth rate for the current year stands at 84.3%, while the Zacks Consensus Estimate of $14.93 for STX\u2019s EPS represents a 47.5% increase from the prior-year period.<\/p>\n Image Source: Zacks Investment Research<\/p>\n![\"Zacks](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2026\/07\/172387.jpg\"\/)
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