AI Infrastructure Demand Fuels Growth Outlook for Applied Digital and Western Digital

The rapid expansion of artificial intelligence (AI) workloads is creating significant opportunities for infrastructure and storage providers, specifically Applied Digital (APLD) and Western Digital (WDC). As hyperscalers and neocloud companies race to secure computing capacity, the demand for dedicated AI data centers and high-capacity storage has intensified. Applied Digital has seen its top line jump by 139% year-over-year in the third quarter of fiscal 2026, reaching $126.6 million. The company is aggressively expanding its footprint, maintaining a $16 billion contracted lease revenue pipeline over a 15-year period. This includes the construction of 400 megawatts (MW) of capacity for CoreWeave and 200 MW for another hyperscaler. With 100 MW already operational and a new 300 MW campus planned for the southern U.S. by mid-2027, the company is well-positioned for accelerated growth. Simultaneously, Western Digital has benefited from a favorable supply-demand environment for hard-disk drives (HDDs), which are essential for AI data center storage. This demand has propelled the company's stock price up 123% in 2026, reflecting strong earnings growth and a positive outlook for storage chip demand. From a market perspective, these companies represent the critical physical infrastructure required to sustain the AI boom. While chipmakers often dominate the narrative, the growth in data center capacity and storage solutions provides a secondary layer of investment opportunity for those focused on the AI ecosystem's foundational needs.