Computer-Storage Devices Stock Outlook: Growth Guaranteed

The Computer – Storage Devices industry is witnessing an exponential rise on widespread use of streaming media, cloud storage solutions, cloud-based apps, data virtualization and other data-intensive chores.

The key driving force of the worldwide storage devices market is its increasing use in mobile devices that have now higher memory capacities. Rampant growth in the amount of data, complexity of data formats and the need to scale resources at regular intervals have compelled several companies to turn to storage devices vendors. This represents significant growth opportunity for the industry players.

As consumers’ dependence on cloud for storage purpose increases, a proportionate rise in demand for cloud-dedicated data centers is inevitable. Also, with a simultaneous increase in data volumes, demand for cloud-based storage systems in data centers is likely to grow significantly.

Extensive implementations of CRM solutions, increased Internet and mobile penetration, rapidly growing media and regulatory compliance have resulted in data explosion for enterprises. Now, these enterprises are realizing the importance of storing information which, in turn, should favor growth.

Banking on the rise of connected devices, the Internet of Things (IoT), virtual reality (VR), and artificial intelligence (AI), the Computer – Storage Devices industry remains a lucrative investment opportunity.

Industry Offers Solid Shareholder Returns

The Zacks Computer-Storage Devices Industry, within the broader Zacks Computer And Technology Sector, has outperformed both the S&P 500 and its own sector over the past year.

While the stocks in this industry have collectively gained 27.5%, the Zacks S&P 500 Composite and Zacks Computer And Technology Sector have rallied 12.5% and 19.2%, respectively.

The secular growth of digital data and higher demand for storage especially for SSDs, contributed to the performance of both the sector and the S&P 500. 

Sector Stocks Trading Cheap

Owing to the strong fundamentals of the industry over the past year, the valuation looks attractive. One might get a good sense of the industry’s relative valuation by looking at its price-to-earnings ratio (P/E), which is the most appropriate multiple for valuing Computer – Storage Devices stocks because their earnings are effective in gauging performance.    

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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