3 Red Hot AI Stocks Sporting Favorable Zacks Ranks: SNDK, WDC, TER

Though it may not feel like it amid recent concerns surrounding technology, particularly in software and some other stocks tied to the broader AI frenzy, many in the trade are still crushing it in the new year, delivering big-time gains.

And concerning the all-star performers, three stocks that sport the highly-coveted Zacks Rank #1 (Strong Buy), SanDisk SNDK, Western Digital WDC, and Teradyne TER reflect top-performing S&P 500 stocks in 2026. What’s been driving the positivity?

SanDisk Soars

SanDisk shares have been melting higher in 2026 months as its role in the broader AI frenzy finally comes into focus. The stock is up nearly 140% in the new year alone, by far reflecting one of the strongest moves we’ve seen.

AI is driving a huge surge in storage demand, which is where SanDisk comes in. NAND prices are rising rapidly, with AI data centers, cloud providers, and edge devices all needing more high-speed storage. The company’s revenue acceleration is evident in recent quarterly releases, with sales of $2.3 billion climbing 22% year-over-year throughout its latest period.

Below is an image illustrating the company’s favorable EPS outlook.

Western Digital

WDC shares impressively reflected one of 2025’s top-performing S&P 500 stocks as well, with the fresh year already looking bright again. Western Digital provides scalable, sustainable technology for hyperscalers, enterprises, and cloud providers, providing cutting-edge innovation that’s expected to drive the next generation of AI-driven data workloads.

Up more than 50%, the stock has been red-hot in the fresh year, underpinned by favorable quarterly results that have revealed a massive opportunity for the company.  Below is an image illustrating the company’s bullish EPS outlook across the board.

It’s critical to note that Western Digital also holds roughly a 20% stake in SNDK.

Teradyne

Teradyne manufactures equipment used by other companies to test chips. Unsurprisingly, the fastest-growing segment here is chips for AI data centers and accelerators, and more complex chips mean greater test demand, with AI chips among the most complex right now.

Up 60%, the stock has enjoyed a great year so far, particularly so relative to the Zacks Technology sector, which is essentially flat YTD. Like those above, the company’s EPS outlook remains notably bright, keeping it at the highly-coveted Zacks Rank #1 (Strong Buy).

Bottom Line

While pockets of the broader Technology sector, particularly software, continue to get hammered in 2026, all three stocks above – SanDisk SNDK, Western Digital WDC, and Teradyne TER – haven’t seen as much negativity, with all three benefiting in a huge way either directly or indirectly from the AI demand environment.

Notably, all three stocks sport the highly-coveted Zacks Rank #1 (Strong Buy).

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

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