The companies that make your hard disk drives are having a rally of a lifetime

• The companies behind hard drives and storage are leading a stock rally.
• The surge comes after Jensen Huang flagged data storage as a key constraint for AI at CES 2026.
• SanDisk led the rally, jumping about 28% on Tuesday.

The companies behind some of tech's least glamorous products — hard drives and storage — are powering a sharp rally on Wall Street.

The surge comes after Nvidia CEO Jensen Huang said at CES 2026 on Monday that the AI boom isn't just about chips, but about where vast amounts of data live.

SanDisk, the flash-memory company spun out of Western Digital last year, has been the standout. Its shares surged about 28% on Tuesday, marking their strongest intraday performance since February. The stock is already up more than 40% just days into January, making SanDisk the top performer in the S&P 500 on Tuesday.

Western Digital and Seagate Technology, two of the world's largest makers of hard-disk drives, are also seeing a boost. Western Digital's shares jumped about 17% on Tuesday, while Seagate rose about 14%.

Huang described the memory storage market as a "completely unserved market today."

"This market will likely be the largest storage market in the world, basically holding the working memory of the world's AIs," he said at CES with analysts on Monday.

"The amount of context memory, the amount of token memory that we process, KB cache we process, is now just way too high," he added, referring to AI storage needs.

Memory prices have been rising. Korea Economic Daily reported on Monday that Samsung Electronics and SK Hynix are pushing for server DRAM price increases of 60% to 70% in the first quarter compared with the previous quarter.

Market analysis firm Counterpoint said last week that memory prices could rise by 40% through the second quarter of 2026, as AI-driven demand continues to strain supply.

Data storage is crucial to AI

The AI race has largely been about chips, data centers, and power. But data storage is coming into focus as a key bottleneck.

Driven largely by AI workloads, the volume of stored global data was expected to top 200 zettabytes in 2025 — the equivalent of 200 billion terabytes.

Analysts have predicted that demand for data storage could run ahead of supply.

"The memory market is at an unprecedented inflexion point, with demand materially outpacing supply," an analyst from global market intelligence firm International Data Corporation wrote in a December note.

"For an industry that has long been characterized by boom-and-bust cycles, this time is different," the analyst said, citing the rapid build-out of AI infrastructure and workloads as a shift that is straining the memory ecosystem.

"For consumers and enterprises alike, this signals the end of an era of cheap, abundant memory and storage, at least in the medium term," the analyst added.