As the AI wave sweeps across the globe, traditional hardware companies once overlooked are becoming the brightest stars in the US stock market with stunning gains. But the question remains: is this a genuine manifestation of AI infrastructure "spillover effects," or the final celebration before a bubble burst?

Driven by the AI boom, the most spectacular performers in the US stock market aren't cutting-edge tech companies, but rather a group of traditional technology enterprises. Seagate Technology PLC has soared 156% this year to become the S&P 500's best-performing stock, while competitor Western Digital ranks third with a 137% gain, and Micron Technology sits fifth with a 93% surge.

These "boring" companies, founded before Facebook founder Mark Zuckerberg and OpenAI CEO Sam Altman were even born, are now benefiting from massive investments in AI infrastructure. Major tech companies are spending hundreds of billions annually on semiconductors, networking equipment, and data center power supplies to support training large language models and running AI workloads.

However, Wall Street remains divided on this phenomenon. Bulls see it as evidence of AI computing demand's broad spillover effects across business sectors, while bears warn it's the latest sign of a stock market bubble. Michael O'Rourke, chief market strategist at Jonestrading, stated:

"When people start looking for secondary and tertiary plays, that suggests the market cycle is in very late-stage territory."

**Traditional Storage Giants Catch the AI Express**

Hard disk drive technology dates back to the 1950s, when devices weighed over 2,000 pounds and could only store 5 megabytes of data. Today's personal computer hard drives can hold 2TB while weighing less than 1.5 pounds. Seagate Technology PLC and Western Digital are now focusing on developing massive data storage solutions required for training large language models.

Since ChatGPT's launch nearly three years ago, AI infrastructure investment has continued flowing. Major tech companies like Microsoft and Alphabet invest hundreds of billions annually in semiconductors, networking equipment, and data center power to train large language models and run AI workloads.

This spending wave has not only propelled NVIDIA and TSMC to trillion-dollar market caps but also benefited previously obscure storage device manufacturers. Micron's high-bandwidth DRAM memory has become a core component of AI computing, yet despite their technical importance, these companies struggle to excite ordinary investors.

Kim Forrest, founder of Bokeh Capital Partners, remarked: "When I talk about them on calls, I can hear people's eyes glazing over. They'd rather talk about flying cars and robot dogs."

Despite soaring stock prices, all three companies maintain relatively reasonable valuations. At the beginning of the year, Western Digital traded at less than 6 times earnings, while Seagate Technology PLC and Micron were around 10 times. Though valuations have improved, they remain below the S&P 500's expected price-to-earnings ratio of 23 times.

Benchmark Co. analyst Mark Miller raised Seagate Technology PLC's target price to Wall Street's highest at $250, still offering over 13% upside from last Friday's closing price of $221. He believes that given strong product demand prospects, Seagate Technology PLC's 20 times valuation level remains attractive.

**Market Bubble Theory Continues to Ferment**

While Wall Street generally favors these three stocks, their price increases have outpaced analyst expectations. Seagate Technology PLC trades more than 20% above its average target price, Western Digital exceeds by over 10%, and Micron trades slightly above expectations.

For traders like O'Rourke, who experienced the dot-com bubble, current conditions are concerning. He stated:

"Historically, any cyclical business usually peaks at low multiples and bottoms at negative earnings. The time to buy is when the cycle turns and companies are losing money, while the time to sell is when multiples look healthy."

The AI boom has similarly driven other traditional industry stocks higher:

- Power producer Vistra Corp rose 53% this year, following a 258% surge in 2024; - Chipmaker Broadcom reached a $1.6 trillion market cap; - Oracle became the S&P 500's tenth-largest company by market cap due to cloud computing service demand, surging 36% in a single day after its September 9 earnings report, with valuations reaching new highs since the dot-com bubble.

Forrest believes AI is currently overhyped, much like internet technology, and actual use case development will take longer than most people expect. She warned:

"If you're buying products specifically for AI or data centers, anything on a straight-line upward trajectory could become a cautionary tale."