After the Memory Chip Surge: Which Analyst Has More Conviction Between Micron and Sandisk?

Original Title: Micron Stock vs. Sandisk Stock: One Is a Much Better Buy, According to a Wall Street Analyst

Original Author: Trevor Jennewine, The Motley Fool

Original Translation and Compilation: Peggy, BlockBeats

Editor's Note: The US stock storage sector is becoming the latest protagonist in the AI trade.

This week, stock prices of memory chip companies like Micron and Sandisk continued to surge. Micron rose approximately 11% in a single day, with its market cap surpassing $700 billion for the first time; Sandisk gained about 12%, and since its spin-off from Western Digital in 2025, its market cap has also climbed above $200 billion. Over the past year, the market's pricing focus on AI has been expanding from GPUs, cloud providers, and large model companies further down to the underlying storage supply chain.

The driving force behind this rally isn't just a spillover of the "AI narrative." It's that data center architectures are fundamentally changing. AI training and inference require storage systems with higher speed, larger capacity, and lower latency: HBM is responsible for rapidly feeding data and models to GPUs, while NAND SSDs handle the storage support during training data loading, model file access, and inference calls. As computing power competition enters the system engineering phase, storage is no longer just a cyclical supporting product in the semiconductor supply chain but a critical factor affecting the efficiency, cost, and scalability of AI infrastructure.

This article focuses on Micron and Sandisk, which occupy two important positions in this storage chain. Micron's key strengths lie in DRAM and HBM, especially for handling high-bandwidth data transfer roles in AI servers. Sandisk's advantages are concentrated in NAND flash and enterprise SSDs, and it gains cost competitiveness through its partnership with Kioxia. Sandisk's ongoing development of High-Bandwidth Flash (HBF) also reflects storage vendors' attempts to solve the mismatch between GPU speed and memory bandwidth.

But what's more noteworthy isn't how much these two companies' stock prices have already risen, but that the capital market is reassessing the value of "storage." In the past, the memory chip industry was highly cyclical; price increases often signaled future supply expansion and price declines. However, against the backdrop of continuously expanding AI demand, investors are betting that this cycle might be prolonged, or even partially alter the traditional supply-demand fluctuation pattern. A recent IDC report also suggests that AI demand could lead the memory chip market into a phase different from any in the past.

Of course, the risks are equally clear. The historical rules of the storage industry have never disappeared: today's shortage could turn into tomorrow's glut after capacity expansion. Once DRAM and NAND prices fall, the earnings elasticity of Micron and Sandisk will also reverse and amplify. Therefore, the real discussion of this article isn't "how much more can AI storage stocks rise," but how investors can distinguish, amidst the AI infrastructure revaluation and the semiconductor cycle, which growth stems from real demand and which has already been priced into the stocks.

This is also the core contradiction in the current storage sector. AI is pushing memory chips into a strategic asset position, but this business still cannot completely break free from the cycle. The rise of Micron and Sandisk is not only a result of AI infrastructure expansion but also a concentrated bet by the market on a "storage super-cycle."

Below is the original text:

The rapid adoption of artificial intelligence (AI) has significantly boosted the growth of memory chip manufacturers Micron Technology (MU, +10.95%) and Sandisk (SNDK, +11.98%). Over the past year, the stock prices of the two companies have risen by 571% and 3,350%, respectively.

Despite the substantial price increases, Cantor Fitzgerald analyst CJ Muse believes both stocks are still undervalued. However, based on his price targets, Sandisk appears to be the more attractive investment at this time.

·Muse set a price target of $700 per share for Micron, implying a 29% upside from its current price of $542.

·Muse set a price target of $1,800 per share for Sandisk, implying a 52% upside from its current price of $1,187.

Here is what investors need to know about these two semiconductor stocks.

Micron Technology: Implied 29% Upside

Micron Technology primarily manufactures memory chips and storage products for smartphones, personal computers, automotive systems, and data centers. According to Counterpoint Research, Micron is the world's third-largest DRAM memory supplier, with products including High Bandwidth Memory (HBM) and NAND flash memory.

Data centers optimized for AI have a much higher demand for storage than traditional data centers. This demand, bordering on "insatiable," has led to an unprecedented supply shortage across the industry. According to the Wall Street Journal, contract prices for DRAM and NAND have increased approximately sevenfold over the past year.

Micron reported impressive results for its second fiscal quarter. Revenue grew 196% to $23.8 billion; non-GAAP (adjusted) net income surged 682%, resulting in diluted earnings per share of $12.20. CEO Sanjay Mehrotra stated: "AI is not just boosting demand for memory; it is fundamentally reshaping the role of memory, making it a decisive strategic asset in the AI era."

There are reasons for investors to be optimistic. HBM is crucial for AI workloads because it can transfer data and models to GPUs at extremely high speeds. Over the past year, Micron has gained 12 percentage points of market share in the HBM segment, and the company is likely to continue expanding its share, as its HBM3E is currently the fastest and highest-capacity HBM product on the market.

However, a note of caution is warranted. Memory chip sales have always been distinctly cyclical. The industry is currently in an upcycle, but historical experience shows that supply shortages eventually turn into supply gluts. At that point, memory prices and Micron's profitability are likely to decline. Wall Street anticipates this trend might reverse around fiscal year 2029, but in reality, no one can accurately predict when the current cycle will peak.

According to Wall Street consensus estimates, Micron's adjusted earnings per share are expected to grow at an average annual rate of 13% in the years leading up to fiscal 2029. Based on this, the current valuation of 25 times earnings seems somewhat expensive. In my view, investors might be better off waiting for a more favorable entry point before buying Micron stock, or at least keep any new positions relatively small.

Sandisk: Implied 52% Upside

Sandisk primarily develops storage devices based on NAND flash memory. Its product portfolio includes external and embedded flash drives for mobile devices, game consoles, and automotive systems, as well as enterprise solid-state drives (SSDs) for data centers.

NAND-based SSDs are a crucial component in the storage hierarchy supporting AI workloads. They are responsible for storing training data and models until they are loaded into HBM. Sandisk is gaining market share in the NAND storage market, partly due to its joint venture with Japanese manufacturer Kioxia. This collaboration allows Sandisk to access low-cost wafers, helping it remain price-competitive.

Sandisk reported impressive financial results for its third quarter of fiscal 2026 (ending in March). Driven by particularly strong demand for data center storage solutions, revenue surged 251% to $5.9 billion; non-GAAP net income rose to $23.41 per diluted share, compared to a loss of $0.30 per diluted share in the same period last year.

CEO David Goeckeler stated: "NAND flash is increasingly becoming the only economically viable solution capable of providing the capacity, performance, and efficiency needed for large-scale real-time inference, keeping models accessible. And this market rediscovery of the criticality of our technology is happening at a time when our product differentiation is at its strongest."

Sandisk is designing a new type of NAND called High-Bandwidth Flash (HBF) to bridge the performance gap between GPU speed and memory bandwidth. HBF will be able to load data and models into HBM faster. Sandisk announced this technology last year and plans to start sampling HBF storage in the second half of this year.

Wall Street expects Sandisk's adjusted earnings to grow rapidly until fiscal 2028, followed by a significant decline in fiscal 2029. Even so, consensus estimates indicate that during this period, the company's earnings will grow at an average annual rate of 25%. Based on this, the current valuation of 38 times adjusted earnings seems reasonable. I believe CJ Muse's assessment that Sandisk is the better buy at current prices is justified.

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