Bernstein names winners and losers in the AI driven data explosion

Investing.com -- Bernstein says the accelerating AI-driven data boom is reshaping the technology landscape, lifting memory and storage providers while pressuring hardware makers struggling with surging component costs.

Analyst Mark Newman argued in a note Thursday that “the Intelligence Revolution driving the data explosion… still has room to run with no signs of slowing in 2026,” and sees no reason for model developers to ease investment as AI capabilities improve.

In its 2026 U.S. IT hardware outlook, Bernstein identifies memory and hard-disk drive suppliers as the clearest beneficiaries.

According to Newman, “the data explosion necessary to enable and run AI models fuels an acceleration in memory and storage demand, creating an unprecedented memory & storage super cycle.”

He notes that intense training workloads, richer content creation, and longer retention requirements are driving “insatiable (and price insensitive) demand” that has resulted in unprecedented price hikes.

Bernstein highlights SanDisk (NASDAQ: SNDK) and Seagate (NYSE: STX) as its top picks for 2026. The firm raised its SanDisk target price to $580, citing “unprecedented NAND shortages and price increases,” while calling Seagate “a less volatile beneficiary of the data explosion.”

But the surge in memory and storage prices is creating losers as well. Bernstein says OEMs stand to suffer the most, with HP Inc. (NYSE: HPQ) and SMCI (NASDAQ: SMCI) facing as much as 19% downside to earnings, while Dell (NASDAQ: DELL) and HPE (NYSE: HPE) also face pressure.

Apple (NASDAQ: AAPL) is largely insulated in the short term due to long-term supplier agreements but may need to raise device prices, potentially weighing on unit growth later this year.

Bernstein also sees rising excitement around quantum computing in 2026, estimating “23% upside for IBM” tied to early quantum use cases.

You May Also Be Interested In