After the Memory Chip Surge: Micron vs. SanDisk, Which Analyst Has the Edge?

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 & Compilation: Peggy, BlockBeats

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

This week, stock prices of memory chip companies like Micron and Sandisk continued their surge. Micron rose approximately 11% in a single day, surpassing a market cap of $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 for AI has been shifting from GPUs, cloud providers, and large model companies to the more foundational memory supply chain.

The driving force behind this rally isn't just the spillover of the "AI concept." It stems from fundamental changes happening within data center architecture. AI training and inference require a memory system with higher speed, greater capacity, and lower latency: HBM rapidly feeds data and models to GPUs, while NAND SSDs support storage for training data, model files, and inference call processes. As the computing power race enters the system engineering stage, memory is no longer just a cyclical supporting product in the semiconductor supply chain. It has become a critical component affecting the efficiency, cost, and scalability of AI infrastructure.

This article focuses on Micron and Sandisk, which occupy two important positions in this memory chain. Micron's core appeal lies in DRAM and HBM, especially its role in providing high-bandwidth data transfer in AI servers. Sandisk's strength is concentrated in NAND flash and enterprise-grade SSDs, gaining cost competitiveness through its partnership with Kioxia. Sandisk's development of High-Bandwidth Flash (HBF) also reflects memory manufacturers' attempts to solve the mismatch between GPU speed and memory bandwidth.

However, what's more noteworthy than how much these two stocks have already risen is how the capital market is re-evaluating the value of "memory." In the past, the memory chip industry was highly cyclical, where price increases often signaled future supply expansion and price declines. But against the backdrop of persistently expanding AI demand, investors are betting this cycle could be prolonged, potentially altering the traditional supply-demand fluctuation pattern. An IDC report also suggests that AI demand may usher the memory chip market into a phase unlike previous ones.

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

This is also the core contradiction in the current memory sector. AI is pushing memory chips into the position of a strategic asset, but this business still cannot completely escape its cyclical nature. The rise of Micron and Sandisk is both a result of AI infrastructure expansion and a concentrated market bet on a "memory 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 stock 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 the current juncture.

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

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

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

Micron Technology: Implied 29% Upside

Micron Technology primarily produces memory chips and storage products for smartphones, PCs, 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.

Data centers optimized for AI have a much higher demand for memory compared to traditional data centers. This demand, almost to the point of being "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 fiscal second-quarter results. Revenue grew 196% to $23.8 billion; non-GAAP (adjusted) net income surged 682% to diluted earnings per share of $12.20. CEO Sanjay Mehrotra stated: "AI is not just boosting demand for memory; it is fundamentally reshaping its role, making it a decisive strategic asset in the AI era."

Investors have reason to be optimistic. HBM is crucial for AI workloads as it transfers 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 market, and the company is likely to continue expanding its share because its HBM3E is currently the fastest and highest-capacity HBM product on the market.

However, it's worth noting that memory chip sales have historically been highly cyclical. The industry is currently in an upcycle, but historical experience suggests that supply shortages eventually turn into supply gluts. When that happens, memory prices and Micron's earnings will likely decline. Wall Street expects this trend might reverse around the fiscal year 2029, but in reality, no one can accurately predict when the current cycle will peak.

According to the Wall Street consensus estimate, Micron's adjusted earnings per share are expected to grow at an average annual rate of 13% through fiscal year 2029. At this rate, the current valuation of 25 times earnings seems slightly expensive. In my view, investors might want to wait for a better entry point before buying Micron stock, or at least keep new positions relatively small.

Sandisk: Implied 52% Upside

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

NAND-based SSDs are a crucial part of the memory hierarchy supporting AI workloads. They store training data and models until they are loaded into HBM. Sandisk is gaining market share in the NAND memory market, partly due to its joint venture with Japanese manufacturer Kioxia. This partnership allows Sandisk to access low-cost wafers, maintaining its price competitiveness.

Sandisk reported impressive financial results for the third quarter of fiscal 2026 (ending in March). Driven particularly by strong demand for data center storage solutions, revenue grew 251% to $5.9 billion; non-GAAP net profit increased 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 to deliver the capacity, performance, and efficiency needed for large-scale real-time inference, keeping models accessible. And this market re-recognition of our technology's criticality is happening exactly 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 begin sampling HBF memory in the second half of this year.

Wall Street expects Sandisk's adjusted earnings to grow rapidly through fiscal year 2028, followed by a significant decline in fiscal year 2029. Even so, the consensus estimate indicates that the company's earnings will grow at an average annual rate of 25% during this period. At this rate, its current valuation of 38 times adjusted earnings seems reasonable. I believe CJ Muse's view that Sandisk is the better buy at the current price is justified.

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