Artificial Intelligence Stock on the Rise: Gained 73% in 2025, Predicted to Climb Further
Seagate Technology, a leading global storage solutions provider, has experienced a remarkable financial turnaround in 2025, with its stock rallying by an impressive 73% year to date, surpassing the Nasdaq Composite index's 7% return. This growth is strongly linked to the surge in artificial intelligence (AI) and its related demand for data storage, especially in the data center market.
The development of AI infrastructure requires massive data center buildout. Over 440 new hyperscale data centers are planned globally, and these centers are expected to represent a market worth $608.54 billion by 2030, growing at a 24.6% CAGR. About 70% of the nearline hard disk drive (HDD) demand comes from hyperscalers, making Seagate a significant beneficiary of this expansion as these centers consume vast amounts of storage.
Seagate has experienced a 136% stock surge between April and July 2025, fueled by AI storage demand coupled with technological breakthroughs like Heat-Assisted Magnetic Recording (HAMR). The company's gross margins have expanded for eight consecutive quarters, and operating margins reached record levels in Q3 2025, reflecting strong operational execution in meeting AI-driven storage needs.
Despite SSDs gaining ground, HDDs still dominate nearline storage in data centers due to cost efficiency for workloads not requiring instant access. Seagate, as one of three major HDD manufacturers, maintains a leading position, focusing its business increasingly on data center storage aligned with AI trends.
The growth in Seagate's revenue is attributed to the healthy demand for mass capacity storage in the cloud, which has created a tight supply environment and led to an increase in prices. This growth in storage demand could push annual revenue for the data center storage market to $23 billion by 2028, up from $13 billion last year.
However, the growth in data centers also presents sustainability challenges. Energy use from data centers may increase by 165% by 2030. While 97% of surveyed data center professionals expect AI to drive further storage demand, there is growing pressure to balance this growth with carbon and total cost of ownership management. Seagate's "Decarbonizing Data" report highlights this issue, and the company is actively addressing these environmental challenges through industry-wide collaboration.
Seagate is also advancing new technologies such as the Mozaic 4+ and Mozaic 5+ HDDs to meet future AI data center needs, ensuring continued competitiveness and capacity growth aligned with AI’s data demands. With its strong earnings growth, attractive valuation, and focus on AI-driven storage solutions, Seagate Technology presents a compelling investment opportunity for those looking for a fast-growing AI stock that is reasonably priced.
[1] Seagate Technology's 2025 Q3 Earnings Report [2] Seagate's "Decarbonizing Data" Report [3] Seagate's Mozaic 4+ and Mozaic 5+ HDD Announcement [4] Seagate's 2025 Q2 Earnings Report [5] Seagate's 2025 Q4 Outlook
- Investors looking for AI-focused stocks may find Seagate Technology appealing, given its significant financial turnaround in 2025 due to the surge in demand for AI-related data storage.
- The development of AI infrastructure necessitates a massive buildout of data centers, leading to an estimated $608.54 billion market by 2030, with 70% of the nearline HDD demand coming from these centers, positioning Seagate as a notable beneficiary.
- The technology sector also plays a crucial role in Seagate's success, as advancements like Heat-Assisted Magnetic Recording (HAMR) fuel the company's stock growth and contribute to its expanding gross and operation margins, making it an attractive investment opportunity.
