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As investors are prioritizing AI data center components, memory integrated circuits might be in for a windfall. BNP Paribas Equity Research senior analyst Karl Ackerman believes that components in short supply, such as memory ICs and optical components, are relatively better positioned demand-wise.
Although Ackerman remains bullish on the sector, he prefers hard disk drives (HDDs) due to their durable supply-and-demand dynamics. In that regard, BNP Paribas expects Seagate Technology Holdings plc (STX) to experience a faster margin expansion than its peers due to the adoption of its 40TB HAMR products in the second half of this year. Its EPS (on a diluted basis) is projected by Wall Street analysts to grow 94.6% year-over-year (YOY) to $3.25 for the third quarter of FY26 (to be reported on May 5, after the market closes).
