Storage Wars: Seagate, Western Digital, and Pure Storage Battle for the AI Era

The New Age of Data Storage

The data storage industry is undergoing a massive transformation, fueled by AI adoption, hyperscaler demand, and the global shift toward cloud and edge infrastructure.

Traditional hard-disk drive (HDD) leaders like Seagate and Western Digital are riding the wave of datacenter growth, while Pure Storage is carving its own path with an all-flash, subscription-based model.

Together, these three companies highlight the different ways storage providers are positioning themselves for the AI-driven future.

Seagate (STX): Build-to-Order Advantage

Seagate has returned to high growth, with FY25 revenue expanding 39% on the back of strong mass capacity sales.

Its build-to-order strategy has boosted margins and kept production largely sold out through mid-2026. Seagate is doubling down on AI-driven demand, rolling out heat-assisted magnetic recording drives and Mozaic 3+ products for hyperscalers.

With global data expected to explode to 394ZB by 2028, management sees a durable growth runway, underpinned by regionalized data center demand and edge AI applications.

Western Digital (WDC): Pure-Play HDD Power

Western Digital’s pure-play HDD business is firing on all cylinders after spinning off its flash division.

The company posted >30% revenue growth in Q4 2025, with cloud shipments surging and gross margins expanding to 41%. Importantly, disciplined supply management has helped reduce the sector’s historical boom-bust cycles, enabling robust free cash flow.

Despite a sharp rally this year, WDC remains the cheapest among peers at just 12x forward earnings, making it attractive for value-focused investors.

Pure Storage (PSTG): Subscriptions, and Hyperscaler Wins

Pure Storage offers a very different angle: a high-growth, subscription-driven model centered on all-flash storage.

Nearly half of its revenue now comes from subscriptions, with ARR and RPO growth outpacing even that. Its recent collaboration with Meta and ongoing talks with other hyperscalers could be major catalysts.

While the stock trades at premium valuations, its 69% gross margin, fast-growing Evergreen One “storage-as-a-service” business, and positioning as a critical AI infrastructure provider justify bullish sentiment.

Final Take

The storage market is no longer just about disks and capacity, it’s about strategy.

Seagate and Western Digital continue to scale with traditional HDD dominance, benefiting from AI-driven datacenter buildouts.

Pure Storage, on the other hand, is challenging incumbents with a high-margin, subscription-first flash model that aligns with the cloud and AI future.

For investors, the choice lies between steady incumbents offering value and cash flow, or a disruptor betting big on subscription-led growth.

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Sources:
1. Seagate Technology Reports Fiscal Q4 & FY2025 Results — reported $2.44B in Q4 revenue, strong margins, and guidance for Q1 FY2026. Available at: https://investors.seagate.com/news/news-details/2025/Seagate-Technology-Reports-Fiscal-Fourth-Quarter-and-Fiscal-Year-2025-Financial-Results/
2. Western Digital Reports Fiscal Q4 & FY2025 Results — Q4 revenue grew ~30% YoY; WD also initiated share buybacks and debt reduction. Available at: https://investor.wdc.com/news-releases/news-release-details/western-digital-reports-fiscal-fourth-quarter-and-fiscal-year-2

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