Micron Technology, Inc. (NASDAQ: MU) is gaining recognition as one of the best data storage stocks to invest in, according to analysts. As part of a broader analysis, Micron’s position in the ever-evolving data storage industry has been compared to other leading stocks, highlighting its strong growth potential.
Data storage refers to the organized preservation of digital information, essential for computing and businesses in today’s digital world. This includes a variety of storage systems, from direct-attached storage to cloud-based solutions, all of which offer different scalability and accessibility levels. According to Fortune Business Insights, the global data storage market, valued at $218.33 billion in 2024, is projected to grow to $774.00 billion by 2032, with a compound annual growth rate (CAGR) of 17.2%. This growth is largely driven by the increasing demand for data storage solutions as big data becomes more prevalent.
The data storage sector is undergoing significant transformation, particularly fueled by the rapid expansion of artificial intelligence (AI) workloads. As global data volume is expected to reach 181 zettabytes by 2025, AI applications generate and process massive datasets, which demand high-performance storage capabilities. The median size of AI training datasets has been increasing exponentially, driving the need for larger and faster storage solutions, especially to support AI-generated content and real-time analytics.
This shift towards larger datasets and real-time data processing is pushing the industry towards solid-state drive (SSD) dominance. SSDs, known for their speed and efficiency, are especially suited for AI’s demanding requirements. Advancements in SSD technology, such as 3D NAND and QLC NAND, are enhancing storage densities and performance. Emerging standards like EDSFF E3 and PCIe Gen 6 are optimizing SSDs for use in AI servers and data centers, with a focus on performance, efficiency, and the growth of Edge AI. While SSDs are becoming the preferred choice for active AI processing, hard disk drives (HDDs) continue to be relevant for large-scale data storage, archiving, and backup due to their lower cost per gigabyte.
Despite the rapid rise of SSDs, HDDs are still vital for specific applications, such as data archiving and surveillance. However, SSD prices are expected to decline as production scales and technology advances, while HDD pricing may plateau due to the maturity of the technology and rising manufacturing costs. The acceleration of AI applications is pushing the storage industry toward a preference for SSD solutions, though HDDs remain valuable in certain contexts.
Our Methodology
To identify the best data storage stocks, we analyzed ETFs and financial media reports, ultimately selecting the 11 stocks with the highest analysts’ upside potential (at least 15% as of March 28). We also focused on stocks that were popular among elite hedge funds, with rankings based on upside potential. Additionally, we provided hedge fund sentiment data from Insider Monkey’s Q4 2024 database to complement our analysis.
Why focus on hedge fund-backed stocks? Our research has shown that following the investment strategies of top hedge funds can help us outperform the market. The strategy of our quarterly newsletter, which selects 14 small-cap and large-cap stocks each quarter, has resulted in a 373.4% return since May 2014, outperforming the benchmark by 218 percentage points.
Micron Technology, with its strong position in the rapidly expanding data storage market, continues to be a standout choice among analysts and investors alike.
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