Previously, US stocks surged wildly on boundless imagination surrounding the high-tech artificial intelligence (AI) future. Now, the market's "hot track" has quietly shifted toward a rather "retro" sector within the technology industry, with legacy tech companies like Seagate Technology (STX.US) and Western Digital (WDC.US) emerging prominently and sparking market buzz.

**Legacy Storage Companies Lead US Stocks with Stunning Gains**

Seagate Technology, which produces computer hard disk drives (HDD), has seen its stock price surge 156% year-to-date, becoming the best-performing stock in the S&P 500 index. Its competitor Western Digital follows closely behind with a 137% gain, ranking third. Meanwhile, Micron Technology (MU.US), America's largest memory chip manufacturer, achieved a record 12 consecutive trading days of gains, with its stock up 93% since the start of 2025, placing it among the index's top five performers.

Most of these companies have long histories and have traditionally kept a "low profile" in the market. They were established well before Mark Zuckerberg (Facebook founder) and Sam Altman (OpenAI CEO) were even born. Their dramatic stock price surges represent, in the eyes of bulls, strong momentum in demand for AI computing equipment that benefits a broader group of enterprises. However, bears view this as the latest signal that the stock market has entered a bubble destined to burst.

"This market performance is a typical characteristic of bubble periods," said Michael O'Rourke, chief market strategist at Jonestrading, who worked as a trader during the internet bubble era and understands such market patterns well. "When valuations in leading sectors become prohibitively expensive and investors start turning to second- and third-tier concept stocks, in my view, this means the market is in the very late stages of its cycle."

**AI Infrastructure Demand Explosion Benefits "Overlooked Sectors"**

Since ChatGPT's debut sparked a global AI frenzy nearly three years ago, infrastructure investment supporting this technology continues to pour in. Tech giants like Microsoft (MSFT.US) and Alphabet (GOOGL.US) spend hundreds of billions of dollars annually procuring semiconductors and networking equipment, while providing power support for data centers running AI workloads and training large language models (LLMs).

This massive investment has driven the rise of chip manufacturers like NVIDIA (NVDA.US) and Taiwan Semiconductor (TSM.US), whose market capitalizations have now exceeded trillion dollars, attracting global investor attention.

Companies like Seagate and Western Digital, while positioned within the AI boom, belong to the most "inconspicuous" category. Hard disk drive history dates back to the 1950s: early products could only store 5 megabytes of data while weighing over 2,000 pounds (approximately 907 kilograms). Today, personal computer hard drives can hold 2 terabytes while weighing just 1.5 pounds (approximately 0.68 kilograms) or even less.

Despite product form evolution, these manufacturers' core focus has remained developing storage solutions—which has become crucial for training large language models requiring massive data processing.

The situation is similar in the memory chip sector. Micron Technology produces high-bandwidth DRAM memory that is an indispensable component in AI computing, yet for ordinary investors, this company struggles to generate "excitement."

"Every time I discuss these companies on the phone, I can imagine the other person's eyes glazing over," admits Kim Forrest, founder of Bokeh Capital Partners. "People prefer talking about cool topics like flying cars and robot dogs."

**Is AI Being Over-Hyped? More "Cold Sectors" Getting Heated**

Forrest, a former software engineer with twenty years of asset management experience, holds Micron Technology stock based on its competitive advantages in the memory market. From a broader perspective, however, she believes AI is currently "over-hyped"—similar to the internet's development path, this technology's application scenarios will take much longer to materialize than most people expect.

"If investors buy targets completely dependent on AI or data centers, betting their performance will grow 'in a straight line,' such investments are destined to become 'cautionary tales,'" Forrest warns.

The AI boom has also lifted other previously "dormant" sectors in the stock market. Power producer Vistra Energy (VST.US) rose 66% in 2023, surged 258% in 2024, and has gained 53% so far in 2025. Chip manufacturer Broadcom (AVGO.US) posted approximately 100% gains in both 2023 and 2024, rising 49% in 2025, with its market cap now reaching $1.6 trillion. Digital storage and memory manufacturer SanDisk Corp (SNDK.US) has been particularly "wild" this month, with its stock up over 100% since September 2nd.

Additionally, legacy software company Oracle (ORCL.US), known for its slow-growing database business, has become the tenth-highest market cap company in the S&P 500 index, driven by surging demand for cloud computing services. On September 10th, following Oracle's earnings release the previous day, its stock jumped 36% in a single day, pushing valuations to their highest levels since the internet bubble era and further fueling debates about whether a "market bubble" exists.

In contrast, Seagate, Western Digital, and Micron Technology have traditionally been among the lowest-valued stocks in the S&P 500 index due to their cyclical business nature and relatively low attention in investment circles. Currently, all three companies are profitable, but over the past three years, each has posted annual losses under Generally Accepted Accounting Principles (GAAP) calculations.

At the start of 2025, Western Digital's forward price-to-earnings ratio (stock price to estimated profit ratio) was under 6 times, while Seagate and Micron Technology were only around 10 times. Although valuations have since climbed, all three companies' current P/E ratios remain below the S&P 500 index (forward 12-month expected P/E of 23 times). Seagate has the highest valuation with a forward P/E of 20 times, but Benchmark Co. analyst Mark Miller believes this valuation remains highly attractive given strong product demand prospects.

Last week, Miller raised Seagate's target price to Wall Street's highest level—$250, suggesting over 13% upside potential compared to Friday's closing price of $221.

"We expect Seagate hard drive prices and profit margins to continue rising, supporting further valuation expansion above historical levels," Miller wrote in a research report last week.

According to Bloomberg-compiled data, Seagate's fiscal 2026 revenue (ending the following June) is expected to grow 16%, down from fiscal 2025's 39% growth rate. Western Digital, whose fiscal cycle aligns with Seagate's, saw fiscal 2025 sales decline 27%, with current fiscal year revenue expected to grow 16%. Among the three, Micron Technology has the strongest sales outlook, with revenue expected to grow 48% this year and 33% next year.

**Wall Street Divided: Time to Take Profits or Room to Run?**

Wall Street generally maintains optimistic views on Seagate, Western Digital, and Micron Technology, but given these stocks' rapid rise, analysts haven't had time to synchronously raise target prices. Currently, Seagate's stock price exceeds analysts' average target by over 20%, Western Digital by over 10%, and Micron Technology slightly above average expectations.

Some Wall Street professionals believe these signals might indicate it's time for investors to take profits from these stocks.

"From historical experience, for any cyclical enterprise, valuations are typically low at performance peaks and hit bottom during losses," explains O'Rourke from Jonestrading. "Therefore, buying timing should be when industry cycles reverse and companies fall into losses, while seemingly 'healthy' valuations often signal selling opportunities."