The Hottest Thing in the Stock Market Is Suddenly Boring Tech

After years of hype surrounding artificial intelligence, Wall Street’s newest breakout stars aren’t sleek AI startups or chipmakers with trillion-dollar valuations they’re old-school hardware names.

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Seagate Technology Holdings Plc, a company best known for making hard disk drives, has become the top performer in the S&P 500 this year, soaring 156%. Its longtime rival Western Digital Corp. isn’t far behind, ranking third with a 137% surge. Micron Technology Inc., America’s leading producer of memory chips, holds fifth place after a record-breaking 12-session winning streak pushed its 2025 gains to 93%.

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For market bulls, the stunning rise of these once-overlooked firms founded long before the likes of Mark Zuckerberg or Sam Altman proves just how far-reaching demand for AI infrastructure has become. Bears, however, see the rally as yet another symptom of a stock market bubble that could be primed to burst.

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“This is exactly the type of activity you see at bubble peaks,” said Michael O’Rourke, chief market strategist at Jonestrading and a veteran of the dot-com boom. “When investors move past the obvious leaders and start chasing secondary plays, it signals we’re late in the cycle.”

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Nearly three years after ChatGPT first ignited the AI craze, spending on the technology’s backbone is still accelerating. Tech giants like Microsoft Corp. and Alphabet Inc. are pouring tens of billions annually into semiconductors, networking gear, and the massive electricity needs of data centers powering AI workloads.

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This tidal wave of investment has already catapulted Nvidia Corp. and Taiwan Semiconductor Manufacturing Co. into trillion-dollar territory. Now, it’s pulling in less glamorous players such as Seagate and Western Digital, whose roots go back to the early days of computing.

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Hard drives, once clunky machines that stored five megabytes and weighed over a ton, have evolved into sleek devices holding up to two terabytes while weighing barely more than a pound. Today, they play a central rolein training AI models that require enormous amounts of data.

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The same dynamic is fueling Micron’s rise. Its high-bandwidth DRAM chips are a critical ingredient in AI computing if memory technology rarely excites casual investors. “When I mention these names, people’s eyes glaze over,” said Kim Forrest, founder of Bokeh Capital Partners. “They’d rather hear about flying cars or robot dogs.”

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former software engineer with two decades of money management experience, Forrest holds Micron for its strong competitive edge. Still, she warns that AI as an investment theme may be ahead of itself. “If you’re only buying companies tied directly to AI or data centers, you’re walking into a potential cautionary tale,” she said.

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The AI boom has also sparked rallies in other unassuming corners of the market. Power producer Vistra Corp. has climbed 53% this year after massive runs in both 2023 and 2024. Broadcom Inc. has reached a market cap of $1.6 trillion following another year of outsized gains. Even Sandisk Corp. has staged a wild rebound, more than doubling since early September.

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Meanwhile, Oracle Corp.—long associated with its slow-moving database business has reemerged as a Wall Street favorite thanks to cloud demand. A single earnings report in September sent its stock up 36% in one day, pushing its valuation to levels last seen during the dot-com era and reigniting bubble concerns.

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By contrast, Seagate, Western Digital, and Micron have traditionally been among the cheapest names in the S&P 500, given their cyclical earnings and relatively small followings. All three are currently profitable but have posted losses within the last three years. At the start of 2025, Western Digital traded at less than six times forward earnings, while Seagate and Micron sat around 10 times. Even after their sharp rallies, all three remain cheaper than the S&P 500’s 23x forward multiple.

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now carries the richest valuation of the group at 20x projected earnings, yet analysts argue it’s still attractive. Mark Miller of Benchmark Co. recently boosted his price target to $250, suggesting more than 13% upside from Friday’s $221 close. “We expect higher HDD prices and stronger margins, which justify multiple expansion,” he wrote.

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Looking ahead, Seagate’s revenue is forecast to rise 16% in fiscal 2026, after an impressive 39% jump in 2025. Western Digital is projected to rebound 16% this year after a 27% drop last fiscal year. Micron has the strongest trajectory, with sales expected to climb 48% in 2025 and 33% the year after.

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Despite the bullish forecasts, the rapid pace of gains has already pushed these stocks ahead of analyst expectations. Seagate trades more than 20% above its average price target, Western Digital sits over 10% higher, and Micron has also edged above consensus estimates.

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For some, that’s a warning sign. “Cyclical businesses tend to peak when multiples look healthy,” O’Rourke of Jonestrading cautioned. “The smart time to buy is usually when they’re losing money, and the smart time to sell is when valuations appear too good.”