It’s been another bumper year for US growth stocks. The artificial intelligence (AI) gold rush is still in full swing, and while household names like Nvidia and AMD have dominated the headlines, it’s the smaller firms behind the scenes that keep the sector ticking.

One area quietly enjoying explosive growth is data storage. After all, every chatbot, server and AI model needs somewhere to stash its ones and zeroes. That’s where companies such as Seagate Technology (NASDAQ: STX) and Western Digital come in. These are the digital storage giants — and one of them is absolutely flying in 2025.

The surging contender

Seagate has emerged as a top-performing US growth stock this year, with the share price up 70% year to date. Earnings growth has followed suit, soaring 343% over the past 12 months.

What’s driving this? Primarily, increasing demand from cloud computing firms and AI developers who need enterprise-level storage at scale. Seagate sits squarely in that sweet spot.

Yet despite the meteoric rise, its valuation remains appealing. The trailing price-to-earnings (P/E) ratio sits at 21.8, with a forward P/E of just 14.3, suggesting the market expects further earnings growth ahead.

Add in a 1.9% dividend yield – relatively high for US growth stocks – and there’s something here for income seekers too. The payout’s well covered, with a ratio of just 42.2%, and it has a respectable 15-year track record of uninterrupted payments.

What’s the catch?

Like most high-growth tech firms, the balance sheet isn’t bulletproof. Seagate carries $5.37bn in debt, and its $8.48bn in total liabilities outweighs total assets of $8bn.

Operating cash flow sits at just $1.08bn, which doesn’t leave much room for error if earnings slip. Its quick ratio’s below 1, a red flag suggesting the company could struggle to meet short-term obligations if conditions tighten.

In other words, this is a business that depends heavily on continued growth. If demand for data storage slows, it could be in trouble.

How does it stack up to Western Digital?

Rival Western Digital operates in the same space and has performed reasonably well this year. But when comparing the two, Seagate looks stronger on nearly every key metric.

Revenue and earnings growth at Seagate far outpace Western Digital, which has seen relatively flat numbers in both areas. Return on capital employed (ROCE) is far higher at Seagate (33% vs 14.7%), pointing to superior capital efficiency. Net margins also favour Seagate, at 16% vs 13.9%.

However, Western Digital does have a slightly lower valuation, which adds growth potential. But it doesn’t pay a meaningful dividend and lacks the long-term track record that Seagate offers.

My verdict

Honestly, both companies are very closely matched. Seagate’s balance sheet raises some eyebrows, and with the stock up 70%, the easy money may have already been made. Western Digital may have more room for growth, but its earnings are lacklustre.

Still, for investors seeking fast-growing US growth stocks with strong fundamentals and AI exposure, I think both are worth considering – even at today’s prices.