Meet the AI Infrastructure Stock That Has Tripled in 2026 (Hint: It Can Still Double)

Investments in artificial intelligence (AI) infrastructure aren't showing any signs of slowing down. Industry bellwether Nvidia recently noted that the top five hyperscalers are on track to spend $800 billion in capital expenditure this year, followed by a significant jump to $1.3 trillion in 2027.

Nvidia management pointed out that the massive $2 trillion revenue backlog that hyperscalers are sitting on will encourage them to accelerate the AI infrastructure build-out. This is great news for Seagate Technology (NASDAQ:STX) investors, who have seen their investment in the data storage specialist more than triple in 2026, as of this writing.

Seagate stock has surged 208% so far this year. Investors can still buy this fast-growing company at an attractive valuation, and doing so could prove to be the smart move, given the potential upside it offers over the next three years.

Let's take a closer look at Seagate's catalysts and check why this AI stock is poised to soar higher.

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Seagate's growth rate is about to accelerate

Seagate released its fiscal 2026 fourth-quarter results (for the quarter ended July 3) on July 29. The company's annual revenue increased by 34% to $12.2 billion. Even better, its earnings per share jumped by 92% year over year to $15.58.

Seagate has been cashing in on the booming demand for storage in AI data centers. The company estimates that data storage demand could increase from 1.1 zettabytes (ZB) in 2024 to 2.4 ZB in 2028, clocking a compound annual growth rate of mid-20% during the forecast period, driven by AI-fueled demand. As a result, Seagate estimates that its total addressable market could jump from $13 billion in 2024 to $23 billion in 2028.

However, Seagate's growth rate in the previous fiscal year suggests that the end market is growing much faster than the company's expectations. That's not surprising, as AI data centers have been gobbling up hard-disk drive (HDD) capacity to store the massive amounts of data needed for AI model training, inference, and agentic AI applications.

The low-cost nature of HDDs sold by Seagate explains why these drives are reportedly sold out until the end of 2027, at least. The shortage of HDDs has led to higher prices. Market research firm TrendForce estimates that HDD prices increased by 10% sequentially in the second quarter. Further price increases can't be ruled out, as the major hyperscalers investing heavily in AI infrastructure are still struggling to procure sufficient storage capacity.

So, it is easy to see why Seagate anticipates stronger growth in the first quarter of fiscal 2027. The company's revenue guidance of $4.1 billion indicates a potential 56% increase from the year-ago period. Even better, the company projects a 180% year-over-year increase in adjusted earnings per share in the current quarter to $7.30 at the midpoint.

Seagate, therefore, is on track to clock a much bigger increase in revenue and earnings in the current quarter. What's more, Seagate's phenomenal growth is poised to continue into 2028, as management noted on the latest earnings call that "the vast majority of our nearline exabytes are now allocated into calendar 2028."

Seagate's customers are now looking to secure supply for 2029 and beyond, suggesting that the strong demand for AI-driven storage is here to stay. That's not surprising, as Seagate notes that data centers now account for 90% of its shipments.

Also, it is worth noting that Seagate is now benefiting from larger price increases due to the widening supply and-demand gap. Management points out that it is pricing its "increased output at a very good price right now," and added that the company won't shy away from capitalizing on the favorable demand-supply environment by hiking prices further.

As such, it is easy to see why analysts are forecasting Seagate's fiscal 2027 revenue to increase at a stronger pace of 54% to $18.78 billion, followed by robust growth over the next couple of years as well.

STX Revenue Estimates for Current Fiscal Year data by YCharts

The favorable pricing environment should pave the way for more upside

We have seen that the favorable HDD demand and pricing environment is here to stay. The heavy investments in AI data centers, Seagate's ability to capitalize on them through long-term contracts, and the pricing power it enjoys will translate into healthy earnings-per-share growth.

Consensus estimates are projecting a 130% increase in Seagate's earnings per share in fiscal 2027 to $35.78. Importantly, Seagate is projected to maintain solid earnings growth over the next couple of years.

STX EPS Estimates for Current Fiscal Year data by YCharts

The good part is that investors can buy this tech stock at just 22 times forward earnings, a discount to the tech-laden Nasdaq-100 index's forward earnings multiple of 24. If Seagate's earnings per share indeed jump to $78.29 after three years and it trades in line with the Nasdaq-100 index's multiple at that time, its stock price could reach $1,879.

That's 121% higher than where Seagate stock is right now. So, this tech stock can still double on the back of solid earnings growth, which is why it makes sense to buy it while it trades at an attractive valuation.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.