AI infrastructure stocks Lumentum, Celestica, Seagate beat Nvidia 2025
Wires and cables in the server room.
Thomas Northcut | Digitalvision | Getty Images
Nvidia It has become the biggest infrastructure winner of the AI boom, rising in value almost thirteen-fold since the end of 2022 to reach a market cap of $4.6 trillion.
As Nvidia’s rise continues into 2025, investors invested in other AI data center plays have made much more money over the past 12 months.
With four of the largest tech companies predicting collective spending of $380 billion on data center and infrastructure construction this year, followed by an expected increase in coming years, Wall Street has poured money into a variety of vendors poised to reap the rewards.
Manufacturers of memory, storage, fiber optic cables, central processors and other enterprise hardware have rapidly gained value this year, driven by the excitement created by the artificial intelligence craze.
Investors will keep a close eye on these five companies in 2026 as high expectations are built into their stock prices.
Lumentum
LumentumThe company, headquartered in San Jose, California, manufactures switches, transceivers and other optical laser-based parts needed for fiber optic cables. Customers are typically telecommunications carriers and device manufacturers. AppleThe company previously used Lumentum parts in the FaceID sensor.
But AI servers also need lots of optical connections. Every graphics processing unit in a rack needs to be connected to every other GPU. Future AI systems will scale up, requiring rack-to-rack optical connections. Eventually all data centers will need to be connected via fiber optic connections.
Lumentum’s share price has increased 375% this year, pushing the company’s market value to over $27 billion. Sales rose 58% year-over-year to $533 million in the last quarter.
“Our growth is fueled by demand for artificial intelligence that encompasses our laser chips and optical transceivers in data centers, as well as the long-distance networks that connect them,” Lumentum CEO Michael Hurlston said in a November earnings call. He said 60% of the company’s sales now come from cloud and AI infrastructure.
Revenue is expected to grow 58% for the fiscal year ending in June, but analysts predict growth will slow to 32% and 15% over the next two years, according to LSEG.
Western Digital
Western Digital is one of the three major hard disk manufacturers and Seagate and Toshiba. Shares of the 55-year-old company have increased by 300 percent this year.
In addition to computing power, AI companies need an increasing amount of space to store applications and other data. In short, data centers need hard drives.
While Western Digital produces solid-state hard drives that use chips to store data, the company is known for hard disk drives that use spinning disks to store terabytes or more of data.
“Data is the fuel that powers AI, and HDDs are what provide the most reliable, scalable and cost-effective data storage solution,” CEO Irving Tan said on an earnings call in October. He gave the example of a hospital using artificial intelligence to analyze 7 billion images.
Revenue rose 27% to $2.82 billion in the latest quarter. The company says selling more storage for data centers will increase profitability as AI companies need larger, more expensive hard drives.
Revenue is expected to grow approximately 23% in fiscal 2026, with growth expected to slow to 13% in 2027.
In February, Western Digital discontinued its flash business. sandiskIt currently has a market cap of around $35 billion, more than half the value of Western Digital.
Micron
Micron One of the three major memory manufacturers along with Samsung and SK Hynix, but the only one headquartered in the US
AI servers need a lot of memory to store and process massive AI models. Chips from Nvidia or Advanced Micro Devices It comes with gigabytes of state-of-the-art memory called high-bandwidth memory. Chip manufacturers are taking up all memory production capacity, causing a worldwide shortage and driving up prices.
Micron beat Wall Street’s sales and earnings estimates in its quarterly report last week, and the stock is now up 239% for the year.
Sumit Sadana, Micron’s business chief, said the company’s memory chips were “oversold.” In December, it even shut down its consumer-focused memory line and solid-state drives to save supply for AI.
Analysts from Morgan Stanley said in a December note that Micron’s results showed the best revenue and profit growth outside Nvidia “in the history of the U.S. semis industry.”
Revenue is expected to nearly double in the year ending August, then drop dramatically to 24% in fiscal 2027 and below 1% in 2028, according to LSEG.
Seagate
An exterior view of a Seagate office in Fremont, California, on October 26, 2022.
Justin Sullivan | Getty Images
SeagateFounded nine years after Western Digital, it is also benefiting from growing demand for storage. The stock is up 229% this year.
In the company’s third fiscal quarter, which ended Oct. 3, sales rose 21% to $2.63 billion. The company said at the time that 80% of its sales went to the data center market.
“There is no doubt that AI is reshaping hard drive demand by increasing the economic value of data and data storage,” CEO Dave Mosley said on a call with analysts.
Bank of America analysts wrote in November that Seagate was unlikely to have extra hard drives in its inventory because additional shipments would be demanded quickly. Analysts also noted that customers have signed make-to-order contracts with solid volume and price commitments.
“Extra units are typically purchased by hyperscale or other large capacity customers,” wrote analysts who recommend buying the stock.
Seagate’s trajectory is similar to Western Digital’s. Analysts expect revenue growth of 21% this fiscal year, followed by increases of around 15% and 6% in the next two years, according to LSEG.
celestica
celesticaFounded as a company in 1994 IBM’s Its subsidiary makes switches that connect networks and manage the data and traffic flowing through them.
The stock is up 236% this year.
The company sells most of its keys to the largest AI buyers. Sales rose 28% to $3.19 billion in the third quarter. Analysts expect revenue growth to rise from 26% this year to 33% in 2026 and 34% in 2027, according to LSEG.
A hyperscaler recently approached the company to produce parts to interconnect liquid-cooled rack-scale computers for artificial intelligence, with mass production planned to begin next year, Celestica CEO Robert Mionis said in an October earnings call.
A boon for Celestica is growing demand for specialized chips called ASICs, which are less flexible than GPUs but can be cheaper to run for certain AI applications.
“Our largest and fastest growing market presence is in AI data centers supporting high-performance networking and custom ASIC AI/ML computing platforms,” said Mionis.
Analysts at Goldman Sachs wrote in a note Friday that Celestica supplies parts for the following products: Google’s ASIC.
“The company should take advantage of being the leading provider of Google TPU rack-level solutions in 2026,” analysts wrote.
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