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 Foo
Translation: Peggy, BlockBeats

Editor's Note: The U.S. stock storage sector is becoming the latest star of AI trading.

This week, the stock prices of storage chip companies such as Micron and SanDisk continued to soar. Micron rose by about 11% in a single day, with a market capitalization surpassing $700 billion for the first time; SanDisk rose by about 12%, and since its split from Western Digital in 2025, its market value has also risen to over $200 billion. Over the past year, the market's pricing focus on AI has been shifting from GPUs, cloud providers, and large model companies to the deeper layers of the storage supply chain.

Behind this rally is not just the "AI concept" overflow but a transformation in data center architecture itself. AI training and inference require a storage system with higher speed, larger capacity, and lower latency: HBM is responsible for rapidly delivering data and models to GPUs, while NAND SSD handles the storage support for training data, model files, and inference calls. As the computational power competition enters the system engineering stage, storage is no longer just a cyclical ancillary product in the semiconductor industry chain but a critical link affecting the efficiency, cost, and scalability of AI infrastructure.

The focus of this article on Micron and SanDisk corresponds to two important positions in this storage chain. Micron's key point lies in DRAM and HBM, especially in its role of high-bandwidth data transfer in AI servers; SanDisk's advantage is mainly in NAND flash memory and enterprise SSDs, gaining cost competitiveness through its partnership with Armor. SanDisk's advancement in high-bandwidth flash HBF also reflects storage manufacturers' efforts to address the mismatch between GPU speed and storage bandwidth.

However, what is more worthy of attention is not how much the stock prices of these two companies have risen but how the capital market is reinterpreting the value of "storage." In the past, the storage chip industry has been highly cyclical, with price increases often indicating future supply expansion and price declines. However, against the backdrop of expanding AI demand, investors are starting to bet that this cycle may be lengthened and may even partially change the traditional supply-demand fluctuation logic. The latest IDC report also suggests that AI demand may lead the storage chip market into a phase different from before.

Of course, the risks are also evident. The historical rules of the storage industry have never disappeared: today's shortages may turn into tomorrow's oversupply once capacity expands. Once DRAM and NAND prices fall, the profit elasticity of Micron and SanDisk will also be inversely amplified. Therefore, what this article truly discusses is not "How much more can AI storage stocks rise?" but how investors can distinguish between growth driven by genuine demand and growth that has already been priced into the stock amid the reassessment of AI infrastructure and the semiconductor cycle.

This is also the core contradiction of the current storage sector. AI is pushing storage chips towards becoming strategic assets, but this business still cannot fully escape cyclicality. The rise of Micron and SanDisk is both a result of AI infrastructure expansion and a market's concentrated bet on the "storage supercycle."

The original text is as follows:

The rapid proliferation of Artificial Intelligence (AI) has greatly propelled the growth of storage chip manufacturers Micron Technology (MU, +10.95%) and SanDisk (SNDK, +11.98%). Over the past year, the stock prices of these two companies have surged by 571% and 3,350%, respectively.

Despite the significant stock price increase, Cantor Fitzgerald analyst CJ Muse still believes that these two stocks are currently undervalued. However, based on his price target, SanDisk seems to be the more attractive investment at this point.

· Muse has set Micron's price target at $700 per share, implying a 29% upside from the current price of $542.

· Muse has set SanDisk's price target at $1,800 per share, implying a 52% upside from the current price of $1,187.

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

Micron Technology: Implies 29% Upside

Micron Technology primarily produces storage chips and 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.

The demand for storage in AI-optimized data centers far exceeds that of traditional data centers. The almost insatiable demand has led to an unprecedented supply shortage across the industry. The contract prices of DRAM and NAND have reportedly increased about sevenfold over the past year, as per The Wall Street Journal.

Micron's performance in the second quarter was remarkable. The company's revenue grew by 196% to reach $23.8 billion; non-GAAP net income surged by 682%, reaching a diluted earnings per share of $12.20. CEO Sanjay Mehrotra stated, "AI has not only driven up the demand for storage but has fundamentally reshaped the role of storage, making it a strategic asset of paramount importance in the AI era."

Investors have reason to be optimistic. HBM enables extremely fast data transfer to the GPU, making it crucial for AI workloads. Over the past year, Micron has increased its market share in the HBM market by 12 percentage points, 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, it is important to note that memory chip sales have always exhibited clear cyclical patterns. The industry is currently in an upswing cycle, but historical experience shows that supply shortages often eventually turn into oversupply. At that point, memory prices and Micron's profitability are likely to decline. Wall Street expects this trend to possibly reverse around the 2029 fiscal year, but in reality, no one can accurately predict when the current cycle will peak.

According to Wall Street consensus expectations, Micron's adjusted earnings per share are projected to grow at an average annual rate of 13% in the years leading up to the 2029 fiscal year. In this context, the current valuation of 25 times earnings appears somewhat expensive. I believe that investors should wait for a better entry point before buying Micron stock, or at least limit new positions to a relatively small scale.

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 key part of the storage hierarchy needed to support AI workloads. They are responsible for storing training data and models until this data is loaded into HBM. SanDisk is gaining market share in the NAND storage market, in part due to its joint venture with Japanese manufacturer Kioxia. This partnership allows SanDisk to access low-cost wafers, helping it remain competitive on pricing.

SanDisk reported impressive third-quarter financial results for the 2026 fiscal year (ending in March). Fueled by strong demand for data center storage solutions, the company achieved a 251% revenue growth to $5.9 billion; non-GAAP net income increased to a diluted EPS of $23.41, compared to a diluted EPS loss of $0.30 in the same period last year.

CEO David Goeckeler stated, "NAND flash memory is increasingly becoming the only economically viable solution that can provide the capacity, performance, and efficiency needed for large-scale real-time inference to keep the models accessible. The market's revaluation of the criticality of our technology happens to coincide with the pinnacle of our product differentiation advantage."

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

Wall Street expects that Sandisk's adjusted earnings will grow rapidly before the 2028 fiscal year and then decline significantly in the 2029 fiscal year. Nevertheless, consensus expectations still show that the company's earnings will grow at an annual rate of 25% during this period. Therefore, the current valuation of 38 times the adjusted P/E ratio is still considered reasonable. I believe that CJ Muse's view that Sandisk is a more attractive buy at the current price is justified.

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