The realm of investing has been consumed by artificial intelligence. What is so ironic is that the “AI leaders” aren’t always who you would have expected them to be ahead of time. And sometimes those companies almost seem baffling if you consider valuations of companies from a pre-AI investing theme.

Tactical Bulls was running various screens of performers and valuations for 2025 and the two best-performing stocks year-to date are companies that many traditional investors simply think of a “hard drive stocks.” It was surprising to see that the S&P 500’s top-performing stocks were none other than Seagate Technology Holdings PLC (NASDAQ: STX) and Western Digital Corp. (NASDAQ: WDC). But here is by how much:

• STX up 144% YTD!
• WDC up 127% YTD!

It is undeniable that these are not just hard-drive companies any longer. Still, gains like this have to raise at least some eyebrows. And, no, this isn’t saying they have to go higher still. And, no, this isn’t saying that their stock prices have to crater either. But, seriously?

It was not that long ago that the stock market would not even dare value these hard drive (and memory, flash, connectivity etc.) stocks were never able to command a premium of 10-times earnings in the stock market. Now look at the valuations:

• Seagate valued at 21-times current year estimates and 17-times next year’s expected earnings
• Western Digital valued at almost 16-times current year estimates and about 14-times next year’s expected earnings

These stocks are up so much now in 2025, but the actual valuation for the companies actually don’t even sound remotely high. Seagate’s market cap is $45 billion and Western Digital’s market cap is $35.5 billion. These sound cheap on the surface for critical hardware providers in a world where $1 trillion valuations are becoming commonplace.

Does it even matter that Wall Street analysts have consensus price targets under the current share prices? That’s for you to decide. Here is how Wall Street analysts have lagged the performance of late:

• Seagate has a current share price of $211 and a consensus analyst price target closer to $172.
• Western Digital has a current share price of $102 and a consensus analyst price target closer to $93.

The reality is that most analysts just haven’t played enough catch-up on these stocks. Well, that’s one potential theory anyhow. On September 11, 2025, Barclays raised Seagate’s price target to $200 from $180 and only has an Equal-Weight rating; but Barclays maintained an Overweight rating on Western Digital and raised its price target to $105 from $80.

BofA Securities more recently (9/15/25) reiterated its Buy rating on Seagate and raised its price objective to $215 from $170 for its more aggressive outlook despite such strong gains already seen. And BofA also reiterated its Buy rating on Western Digital and raised its target to $123 from $100.

These are still both very close to current share prices. The driver of the call, no pun intended, is that the HDD industry remains in a supply-driven market. Their view is that customers are now taking whatever product they can get on a “good enough” basis.

Again, take any analysis here and reference here even from outside sources with a grain of salt. Tactical Bulls has no dogs in this fight — no formal ratings and no formal price targets. This certainlt is not investment advice, nor any recommendation to buy or sell either stock. It’s still hard to get past certain performance metrics and earnings multiples when the stock market was never even willing to value either company at even 10-times earnings.