Here's the One Storage Stock I'd Buy With $2,000

Western Digital (NASDAQ:WDC) CEO Irving Tan said in late January that the company was "pretty much sold out for calendar '26." On the same fiscal second-quarter earnings call, he pointed to firm purchase orders from its top seven customers covering this year's hard-drive production. And multiyear agreements went further -- the company had them in place with three of its top five customers, two running through calendar 2027 and one through calendar 2028.

But Western Digital isn't the outlier.

The artificial intelligence (AI) data center build-out has storage buyers committing for years ahead. Seagate Technology (NASDAQ:STX) says most of its nearline exabytes (the high-capacity storage cloud data centers run on) are already allocated into calendar 2028. And Sandisk (NASDAQ:SNDK) has buyers locked in for over half of the memory it expects to ship this fiscal year, with price floors attached.

Here's what each company has signed, and where I'd put $2,000 today.

Image source: Getty Images.

1. Western Digital: sold out, but not fully signed

By late April, Tan was saying agreement durations had stretched into calendar 2028 and calendar 2029.

Western Digital's fiscal fourth-quarter revenue (for the three months ended July 3, 2026) reached $3.75 billion, up 44% from a year earlier. Non-GAAP (adjusted) gross margin jumped about 13 percentage points year over year, to 54.4%, and earnings per share more than doubled. Management guided for fiscal first-quarter revenue to grow 42% to 49% year over year, or about $4.1 billion at the midpoint.

Cloud customers supplied 89% of revenue in the fiscal third quarter -- this is overwhelmingly a data-center business now.

However, the multiyear agreements cover only some top customers (three of the top five, as of January). And Western Digital hasn't said how much of its demand beyond this year they lock in.

Shares cost about 14 times fiscal 2028's expected earnings (that fiscal year ends in mid-2028). That isn't a rich price if the contracted growth arrives. But the risk, I think, sits in the years the contracts don't cover, when pricing could reset lower.

2. Seagate: pricing is locked for all of 2027

Seagate goes further. On its July earnings call, management said its build-to-order contracts already spell out product configurations and pricing for all of calendar 2027. Based on supply agreements in hand, most of the company's nearline exabyte supply is allocated into calendar 2028.

Growth is accelerating as those commitments stack up. Revenue for fiscal 2026 totaled $12.2 billion, up 34%, and the fiscal fourth quarter alone produced $3.63 billion, a 48% year-over-year jump. Adjusted gross margin hit 52.7%, up from 37.9%, and non-GAAP earnings per share of $5.71 was up 120%. Guidance calls for about $4.1 billion of fiscal first-quarter revenue, which implies about 56% year-over-year growth.

That acceleration is the part I keep coming back to. After all, with volumes and prices signed well in advance, a 56% outlook is largely a description of business already in hand.

At about 15 times its expected fiscal 2028 earnings, Seagate costs about what Western Digital does relative to profits. Arguably, more of Seagate's profits are already under contract.

3. Sandisk: floors under half its shipments

Sandisk's commitments run deepest of the three. The flash memory maker has signed 10 long-term supply agreements covering eight customers.

Management expects over half of its fiscal 2027 volumes (the year now underway) to fall under the agreements, and about two-thirds of fiscal 2028's. And the contracts carry price floors. Even with every variable price at its floor, the agreements add up to at least $93.9 billion of revenue.

The floors haven't been tested by a falling market yet, though. And the boom they lock in is extraordinary: Sandisk's fiscal 2026 revenue climbed 175%, reaching $20.25 billion, on higher memory prices and a shift toward data-center customers.

Which one would I buy?

A $2,000 budget buys about four shares of Western Digital at around $467 as of this writing, two of Seagate, or one of Sandisk.

My pick is Seagate. Its contracts already fix pricing for all of calendar 2027, and most of its nearline capacity is spoken for into the year after that. Growth is accelerating, too.

Western Digital is riding the same boom at a similar price relative to expected earnings. But it hasn't shown how much of its supply beyond this year is locked in the way Seagate has, so I view that stock as a hold today. Sandisk may have the strongest protection of the three, but its floors haven't been through a downturn. I'd want to see that test first.

Of course, no contract makes the AI build-out permanent. If data-center spending slows, storage stocks could fall hard, signed volumes or not. Ultimately, though, given $2,000 to put into storage today, I'd buy Seagate.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Western Digital. The Motley Fool has a disclosure policy.