Buy 2 AI-Driven Storage Devices Stocks at Lucrative Multiples and Price

Industry Overview - The computer storage devices industry is expected to benefit from growth in cloud computing, IoT, connected devices, virtual reality, and AI, leading to increased demand for data storage solutions [1] - The industry is currently ranked in the top 12% of the Zacks Industry Rank, indicating an expectation to outperform the market in the next three to six months [2] - The industry is on a growth trajectory due to the rapid increase in data, complexity of data formats, and the need for scalable resources [4] Company Insights: Super Micro Computer Inc. (SMCI) - SMCI is a total IT solution manufacturer focusing on AI/ML, Cloud, HPC, Storage, and 5G/Edge technologies, with its solutions gaining traction [7] - The company’s servers are optimized for NVIDIA's high-performance GPUs, positioning SMCI for profitable growth in AI clusters and hyperscale data centers [8] - SMCI's liquid-cooled server solutions address power and thermal challenges for large-scale AI workloads, enhancing customer retention and repeat business [9] - SMCI has an expected revenue growth rate of 59.2% and earnings growth rate of 15.4% for the current year, with a significant improvement in next year's earnings estimate [10] - The stock is currently trading at a 68.9% discount to its 52-week high, with a potential upside of 76.8% based on brokerage targets [12] Company Insights: Western Digital Corp. (WDC) - WDC is well-positioned to benefit from increasing sales in the Cloud market, driven by demand for nearline HDDs and lower operating expenses [15] - The company anticipates significant growth in 2025 due to rising demand from cloud providers and advancements in AI [16] - WDC expects generative AI adoption to drive storage demand across both HDD and Flash, leading to a refresh cycle in client and consumer devices [17] - WDC has an expected revenue growth rate of 25.7% and earnings growth rate of over 100% for the current year, with positive revisions for next year's estimates [19] - The stock is trading at a 40.5% discount to its 52-week high, with a potential upside of 85.7% based on brokerage targets [22]