Will 2026’s Top Stocks Keep Riding the AI Infrastructure Boom?

Key Takeaways

• SanDisk, Bloom Energy, Intel, Western Digital, and Seagate—all companies integral to the AI supply chain—are the best-performing stocks under Morningstar’s coverage so far this year.
• Analysts say the near- and medium-term business prospects for these stocks are strong, even if there are long-term questions.
• With big rallies stretching valuations, the question for investors is whether the good news is priced in.

The five US stocks under Morningstar coverage that have posted the biggest gains in 2026 share one key attribute: Their businesses are exploding thanks to the artificial intelligence buildout.

Leading the best-performing stocks this year is flash memory provider SanDisk SNDK, which has risen a remarkable 464.5% in 2026 with a share price that has exploded to over $1,500 from $34 a year ago. Second-best on the Morningstar coverage list is renewable energy fuel-cell firm Bloom Energy BE (the only non-tech company among the five best performers), up 197.7%. Semiconductor industry stalwart Intel INTC has gained 197.1%. Following close behind are hard-disk drive suppliers Seagate STX and Western Digital WDC, each with 2026 gains in the neighborhood of 180%.

All five companies are scaling to meet the immense demand for AI-related computer hardware and the infrastructure needed to power the boom, with several reporting the highest gross margins in their histories.

In the near and medium terms, Morningstar analysts say the outlook for these names looks strong. What’s less clear is the longer-term outlook. “A key debate for hard disk drive makers—and all firms tied to the AI buildout—is the surge’s durability,” writes Morningstar director of equity research Eric Compton. However, “at least for now, earnings visibility is at an all-time high.”

And then there are the valuations. According to our analysts, two of the stocks are trading in overvalued territory, while three are fairly valued.

Earnings Propel the Best-Performing Stocks

While all five of the top stocks were having a strong start to 2026 before April, earnings reports helped kick these names into overdrive, as they showed huge AI infrastructure demand. Morningstar senior equity analyst William Kerwin writes, “Every superlative would be underselling [SanDisk].” The firm spun off from Western Digital in early 2025 and has since raked in billions from accelerating price growth for NAND flash memory. New business model agreements now cover five customers and include more than $42 billion in remaining performance obligations, Kerwin says—an immense expansion that has led the company to set “blowout” June-quarter guidance.

Western Digital and Seagate delivered a “stellar” quarter on AI momentum, according to Compton, with Morningstar adjusting both companies’ fair value estimates upward roughly 50%. Compton says the fourth-quarter outlook implies growth will only accelerate, especially if the demand continues to outstrip supply for AI storage. “Our view now assumes the AI buildout leads to structurally advantaged pricing for hard disk drive makers through at least 2030. If it lasts even longer, shares could be worth more,” he says.

Intel posted first-quarter earnings that reflected overwhelming demand for its server processors, or CPUs, on the winds of agentic AI expansion, according to Morningstar senior equity analyst Brian Colello. Additional reports that Apple AAPL is considering partnering with the company to manufacture chips in the United States rocketed Intel’s trading price to a record high of $114.51 on May 7. This week, Colello raised his fair value estimate on Intel to $90 per share from $60, saying, “server processor demand is poised to grow faster than our prior expectations, which bodes well for Intel over the next five years.”

Capitalizing on the gap between all this AI-related manufacturing and actively operational data centers is Bloom, with margins up an astronomical 1,330 basis points year on year to 17.3%. Bloom announced an expanded partnership with Oracle ORCL on April 13 to supply up to 2.8 gigawatts of its fuel cell systems, which are deployed onsite where energy is consumed. “Traditional power generation equipment (like turbines) takes years to fill orders, while Bloom’s equipment only takes months,” says Morningstar director Joshua Aguilar. “These data centers are thirsty for power.”

Long-Term Cyclicality Remains a Concern

Kerwin explains that AI infrastructure is an increasingly commoditized industry, so these companies face risks if the supply/demand imbalance shifts out of their favor. Take SanDisk, which Kerwin writes could see “significant margin compression and sales declines” if prices normalize and the incremental revenue driving its massive gains is cut. “Management says this time is different and pointed to new long-term supply agreements. We’re skeptical,” he writes.

Although Morningstar analysts see few signs of AI demand easing, a lack of pricing power raises concerns for more long-term structural growth. Market erosion is another risk. According to Colello, leading hyperscalers have capable in-house teams building CPUs today. He says that’s a concern for the makers of chips and processors, like Intel, which sell to mega-cap software companies at a premium.

The 5-Top Performing AI Infrastructure Stocks

Here’s more on what our analysts think of each of the top-performing stocks.

SanDisk

In the tight NAND supply environment, investors can be forgiven for doing a double-take. Supply expands slowly, while demand for artificial intelligence expands rapidly, leading to immense price growth for commodity-like chips. The current upcycle continues to exceed our expectations.

Pricing is not just growing rapidly, it’s accelerating. With growth coming entirely from pricing, incremental revenue is effectively pure profit, with Sandisk’s year-over-year incremental gross margin at 100% in the March quarter. We see further room for margin expansion.

We worry about long-term cyclicality. Management says this time is different and pointed to new long-term supply agreements. We’re skeptical. We still expect prices to normalize over the longer term and believe the firm will be prone to significant margin compression and sales declines when they do.

Sandisk has been the top performer in the S&P 500, rising more than 3,300% in the last 12 months and more than quadrupling year-to-date. This looks justified against massive pricing growth, but we caution long-term investors about downcycle risk when pricing turns over.

William Kerwin, CFA

Bloom Energy

Bloom continues to surprise us. It benefits from delays between when new data centers are built/ready to operate and when they can receive power. The business models of Bloom’s competitors are predicated on customers waiting several years to receive equipment orders.

By contrast, Bloom has taken a different approach, choosing to rapidly build capacity to power the artificial intelligence revolution. This helps Bloom since its solid oxide fuel cells are price-competitive with gas turbines in certain cases, especially when accounting for tax credits.

So, we’d agree with the expectation that SOFC providers like Bloom should continue to benefit given costs relative to alternatives and truncated lead times to fill orders. However, Bloom is priced for perfection, with the market assuming a multiyear trend with little margin for error.

Joshua Aguilar

Western Digital

A key debate for hard disk drive makers—and all firms tied to the artificial intelligence buildout—is the surge’s durability. At least for now, earnings visibility is at an all-time high. Western Digital has purchase orders and agreements extending into 2028 and 2029, effectively derisking the medium-term outlook.

Agreements seem to lock in exabyte volume while leaving room for pricing upside as Western Digital meets certain capacity goals. Management said it has no plans to increase unit capacity and instead will bring more exabytes to market by increasing areal density.

We are increasing our fair value estimate once again, to $415 per share from $277, and view the shares as fairly valued. Each update has brought revisions to our exabyte assumptions (assuming even more shipped) and, most importantly, our pricing assumptions.

Eric Compton, CFA

Seagate Technology

We now believe the fundamentals around Seagate have structurally changed. Management’s commentary on “structural growth” is supported by a supply/demand imbalance that shows no signs of easing, and we do not believe agentic artificial intelligence and inference demand are likely to slow.

The HDD market has become concentrated, with only three players remaining: Western Digital, Seagate, and Toshiba. Seagate and Western Digital have jostled back and forth for top share over the last decade, while Toshiba remains a distant third. We think Seagate and Western Digital will generally maintain technological parity over the long term. For now, though, Seagate has a slight edge, as it was focused from the start on HAMR—heat-assisted magnetic recording—technology, which is now turning into the default for the industry. Seagate is already shipping 36-terabyte hard drives based on its Mozaic 3+ platform, and Western Digital is shipping 32 TB drives based on its ePMR technology. Seagate plans to introduce 36-44 TB drives based on HAMR technology by late 2026.

Our view now assumes the AI buildout leads to structurally advantaged pricing for HDD makers through at least 2030. If it lasts even longer, shares could be worth more.

Eric Compton, CFA

Intel

We know that Intel was prospering in the near term from high demand for server CPUs used in general-purpose computing, AI hosts, and head nodes within AI GPU servers, and agentic AI applications. However, the runway for medium- and long-term growth, as indicated by AMD and others, is quite a bit above our projections from just a couple of weeks ago. Also, our fears of slower PC revenue growth will likely be a nonissue and not provide much of an offset to server growth.

Regarding risks, we foresee a host of competition. Among x86-based CPUs, AMD is currently growing faster and has gained share in recent years. Nvidia is also delivering its Vera CPU to more and more of its AI rack-scale solutions. It’s plausible that the server CPU market could explode, but the value is not captured by Intel. We think Intel’s future will hinge on its ability to develop the Intel 14A manufacturing process within Intel Foundry, to not only build leading-edge processors internally but, more importantly, attract external chip designers to Foundry.

While we now think the massive rally in Intel’s shares was mostly justified, we still think the shares, trading in the $110 range today, are a bit overvalued.

Brian Colello, CPA