2 AI Stocks That Beat NVIDIA - and Could Soar Even Higher

With the advent of artificial intelligence (AI), NVIDIA Corporation’s NVDA shares scaled higher on strong demand for its cutting-edge chips and CUDA software ecosystem. However, gains have slowed this year, with shares up only 5.4%. This is because sky-high expectations and a lack of significant earnings surprise have dampened investors’ enthusiasm. Additionally, ongoing geopolitical crises leading to supply-chain disruptions and U.S. export curbs on chip sales to China could weigh on NVIDIA’s future margins. 

NVIDIA stock also came under pressure recently as investors remained concerned about the potential financial and execution risk associated with funding OpenAI’s massive AI infrastructure projects. Therefore, it’s prudent for investors to look beyond NVIDIA and consider other stocks within the AI ecosystem that have significantly outperformed the chip behemoth while still offering further upside.  

Notable among them are Sandisk Corporation SNDK and Western Digital Corporation WDC, whose shares have soared 438.5% and 189%, respectively, year to date. Let’s see why they have more room to run and what makes them compelling investment opportunities –  

SNDK’s AI Memory Growth and Earnings Momentum Signal Upside 

Sandisk has now established itself as the most sought-after AI memory investment, driven by strong demand for its AI-focused products. Additionally, a favorable demand-supply environment has strengthened the company’s pricing power and bolstered its growth outlook. 

Sandisk expects fiscal fourth-quarter 2026 revenues to be in the range of $7.75 billion to $8.25 billion, according to investor.sandisk.com. Revenues for the fiscal third quarter of 2026 were $5.95 billion, up 97% sequentially and well above its own guidance. This momentum indicates that Sandisk is expanding its presence among high-value data center customers.  

The company’s profitability is improving, with Sandisk projecting non-GAAP earnings per share (EPS) of $30 to $33 for the fiscal fourth quarter, up from $23.41 in the fiscal third quarter. The guidance indicates sequential earnings growth, driven by favorable pricing dynamics. 

In addition, Sandisk’s multi-year strategic partnerships under its New Business Model agreements have strengthened customer retention, enhanced revenue visibility, and improved the predictability of long-term cash flows, supporting further upside in its share price.  

Consequently, the company’s expected earnings growth rate for the current year is an exceptional 2,111%. Technical chart patterns also favor Sandisk. For instance, the company’s shares are currently trading above the long-term 200-day moving average (DMA), signaling an uptrend.

Technical Indicator & Overlays – Sandisk

Image Source: Zacks Investment Research

Western Digital’s AI Demand and Margin Growth Signal Upside 

Western Digital expects revenues of about $3.65 billion, plus or minus $100 million, in the fiscal fourth quarter of 2026, up from $3.34 billion reported in the fiscal third quarter of 2026, which was up 45% year over year, according to the company’s press release. The revenue momentum indicates robust AI infrastructure demand as cloud providers and businesses continue expanding storage capacity for rising AI workloads. 

Strong demand for Western Digital’s enterprise hard disk drives (eHDDs) and favorable pricing trends are benefiting the company. Western Digital expects non-GAAP gross margin of 51-52% for the fiscal fourth quarter, up from 50.5% in the previous quarter. The high margins would provide the company funds for research and development and support long-term growth initiatives. 

As a result, strong AI-driven demand and improving financial performance are expected to act as a catalyst for Western Digital’s share price. Consequently, the company’s expected earnings growth rate for the current year is a solid 104%. Further, the WDC stock is currently trading above the long-term 200-DMA, signaling a bullish trend.

Technical Indicator & Overlays – Western Digital

Image Source: Zacks Investment Research

Both Western Digital and Sandisk currently have a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research