Unless you’ve been living under a rock, you’ll know artificial intelligence (AI) has driven the market in 2026.
But here’s the thing: the year’s biggest winners weren’t the chip designers everyone talks about.
The S&P 500 has returned roughly 11.36% year-to-date (YTD).
Respectable.
Pedestrian, though, next to the eight names below.
Sandisk (NASDAQ: SNDK) led the pack with a staggering 707.11% return. Behind it: Dell Technologies (NYSE: DELL) at 245.54%, Micron (NASDAQ: MU) at 243.12%, Western Digital (NASDAQ: WDC) at 238.18%, Seagate (NASDAQ: STX) at 230.56%, Intel (NASDAQ: INTC) at 197.67%, Marvell (NASDAQ: MRVL) at 177.49%, and AMD (NASDAQ: AMD) at 160.50%.
Eight winners.
One common thread.
Let’s dig in.
The real AI bottleneck nobody watched
Everyone knows AI needs chips to think.
Far fewer investors realised it also needs somewhere to store what it produces and remembers.
That’s where five of these eight names live: memory and storage.
And here’s the kicker.
This isn’t a story about revenue promises; it’s about pricing power.
When demand outstrips supply, prices surge – and that flows straight to the bottom line.
Look at Micron.
Revenue for its quarter ended 28 May 2026 (3QFY2026) rocketed 346% year on year (YoY) to US$41.5 billion.
Both DRAM and NAND selling prices climbed sharply, driving the margin expansion.
Gross margin expanded to 85%, from 39% a year ago.
As for net income? It surged to US$28.2 billion, from just US$1.9 billion.
Sandisk tells the same tale.
Revenue climbed 251% to US$6.0 billion, with non-GAAP gross margin expanding to 78.4% – up an eye-watering 55.7 percentage points.
The flash memory maker swung to US$3.6 billion in GAAP net income from a US$1.9 billion loss.
Then it paid off its debt entirely.
The hard-disk names caught the same wave.
Western Digital’s revenue rose 45% to US$3.3 billion as exabytes sold jumped 34%, lifting net income to US$3.2 billion.
Seagate’s revenue grew 44.1% to US$3.1 billion, with gross margin climbing to 46.5% from 35.2%.
Both point to the same culprit: AI-driven data creation, and the scramble for high-capacity drives to hold it all.
As far as these companies are concerned, AI has turned storage from a commodity grind into a genuine shortage.
When servers meet silicon
Dell rounds out the infrastructure story.
Its AI-optimised server revenue surged 757% YoY to US$16.1 billion, dragging total revenue up 88% to a record US$43.8 billion.
Management then raised its full-year AI server target to US$60 billion – roughly 2.4 times the prior year.
Memory makers supply the components; Dell builds and ships the systems that house them.
AMD adds the compute angle.
Data Center revenue grew 57% to US$5.8 billion on demand for its EPYC processors and Instinct MI350 GPUs, driving group revenue up 38% to US$10.3 billion and net income up roughly 95%.
Two winners that need a closer look
Now, here’s something everyone should remember: a soaring share price doesn’t always mean soaring profits.
Take Intel.
That 197.67% return looks impressive – until you spot the US$3.7 billion net loss behind it, wider than a year ago, weighed down by US$4.1 billion in restructuring and impairment charges.
Yes, revenue grew 7%, led by a 22% jump in data-centre sales.
But make no mistake: the returns are running well ahead of the earnings here.
Marvell is cut from similar cloth.
Revenue rose 28% to a record US$2.4 billion on AI demand – yet net income fell 81% to US$34.5 million, largely a non-cash charge tied to its Celestial AI acquisition.
A 177% return on shrinking profits is worth watching closely.
We flag these two not to dismiss them, but because honest investing means separating price momentum from business fundamentals.
Get Smart: Follow the Money, Not the Mania
When you add it all up, the pattern is hard to miss.
The biggest winners weren’t the flashiest AI names.
They were the companies supplying the memory, storage and infrastructure that AI simply cannot run without.
And most backed their share-price gains with the real thing: rising revenue, expanding margins, genuine free cash flow.
But patience still matters.
Memory and storage cycles have turned before.
Today’s shortage-driven margins may not hold forever – and two of these eight already show a gap between price and profit.
Without a doubt, AI demand is real, and it’s paying off today.
The task now is to watch whether these businesses can keep it up.
After all, where the business goes, eventually the stock will follow.
The headlines feel worse than the market itself.
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Disclosure: The Smart Investor does not own shares of any stock mentioned.
