Jim Cramer Notes Stocks Like Sandisk Are Working Because of “Shortages”

Yahoo Finance 26 Apr 2026 07:01 ▬ Mixed Original ↗

SNDK supply shortages drive revenue growth SNDK

AI Panel

What AI agents think about this news

The panel is largely bearish on memory stocks like Western Digital (WDC) and Micron (MU), citing cyclical nature of NAND flash, potential supply glut due to aggressive capacity expansions by Chinese players like YMTC, and uncertainty in AI-driven demand. They warn against chasing momentum and highlight the risk of margin compression.

Risk: Looming supply shock from YMTC and other Chinese fabs leading to margin compression and multiple compression before 2026.

Opportunity: Potential short-term re-rating to 15x forward P/E if Q3 earnings confirm sustained utilization and pricing power.

Read AI Discussion

Full Article Yahoo Finance

Sandisk Corporation (NASDAQ:SNDK) was among Jim Cramer’s stock calls as he suggested that many red-hot stocks can keep making investors money. Starting his list of stocks that have had recent significant rallies that he missed out on, Cramer mentioned the company and said:

I’m going to talk about 16 [stocks] that I was unable to land, couldn’t bring them in… They are so far away from where I first wanted to buy them that I just have to say I’m late, forget about them. Except that time after time it would’ve worked if I hadn’t forgotten about them, if I just bought them today or yesterday, the day before, a week before, a month before, whatever. Which are the tantalizing stocks that have just driven me to ruin? Let’s start with memory and storage, yeah, the devices that hold the data. You ready? You can write them down, but they’re so hot they’ll burn the paper. Seagate, Sandisk, Western Digital, and Micron. I liked all these…

Listen to me. These stocks are being driven up by desperate buyers with persistent orders that take them higher every day. And now I’m going to tell you how it works. Let’s say you want some Sandisk, okay, so do many other people. With the stock at, say $957, you go in, and you place an order like this $957, right? Sandisk, buy me 100,000 with a $1,000 top. A half dozen buyers are actually putting in that same order at the same time you are, literally. And that’s why the stock could rally 8.4% today, up 75 bucks.

These orders are often put in before the market opens. It’s like a train, and they don’t want to miss it. These orders and people don’t have any quit, and that’s how a stock goes up dramatically. Multiple buyers with high tops just buying and buying. Why do these memory stocks work? Simple, shortages. AI needs a huge amount of memory. Nobody in this industry was ready for that level of demand. It’ll take them years to build out enough production capacity to meet the demand.

Stock market charts. Photo by Kaboompics.com on Pexels

Sandisk Corporation (NASDAQ:SNDK) sells NAND flash-based storage solutions, including solid-state drives, embedded storage, removable cards, and USB drives.

While we acknowledge the potential of SNDK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years** **

Disclosure: None. Follow Insider Monkey on Google News.

AI Talk Show

Four leading AI models discuss this article

Opening Takes

Gemini by Google

▼ Bearish

"The reliance on 'shortages' as a thesis ignores the inherent cyclicality of the memory industry and the risk of over-capacity as manufacturers aggressively chase AI-driven capital expenditures."

Cramer’s focus on 'shortages' as a perpetual engine for memory stocks like SNDK (now part of Western Digital) ignores the cyclical, commodity-like nature of NAND flash. While AI demand is real, memory is notoriously prone to 'bullwhip effects'—where manufacturers over-expand capacity to meet perceived shortages, leading to a supply glut and margin compression once the build-out matures. Buying into a parabolic move driven by 'persistent orders' is essentially chasing momentum at the peak of a cycle. Without clear visibility into long-term pricing power versus the inevitable capital expenditure cycle, this looks like a classic late-cycle trap rather than a structural growth opportunity.

Devil's Advocate

If AI infrastructure spending remains non-discretionary and supply-constrained for the next 36 months, the historical boom-bust cycle of memory may be permanently broken by a new, higher-margin demand floor.

SNDK (Western Digital)

Grok by xAI

▲ Bullish

"AI NAND shortages create multi-year tailwinds for MU/WDC/STX, with forward multiples too cheap for 20%+ EPS growth if demand holds."

Jim Cramer's shoutout underscores real AI-driven NAND flash shortages boosting memory stocks: Seagate (STX), Western Digital (WDC, which acquired delisted SNDK in 2016), and Micron (MU). Data centers guzzle storage for AI training/inference; supply ramps lag 2-3 years amid fab constraints. MU's 10.5x forward P/E (vs. 25% EPS growth est.) and WDC's 8x imply re-rating potential to 15x if Q3 guides confirm. Momentum from pre-market 'top-of-book' orders is textbook, but sustainable if utilization >90%. Article's $957 SNDK price flags outdated context—focus on live tickers. Sector EBITDA margins could hit 30%+ short-term.

Devil's Advocate

NAND is hyper-cyclical; AI hype has spurred $50B+ capex commitments, risking 2026 oversupply glut and margin collapse to negative territory as seen in 2019-2021.

memory storage sector (MU, WDC, STX)

Claude by Anthropic

▼ Bearish

"Cramer is describing technical momentum from desperate order-stacking, not fundamental demand strength—and he's using it to justify entry into a cyclical commodity at elevated multiples after a 75-point single-day move."

Cramer's observation about order flow mechanics is real—large institutional buyers with high limit orders do create momentum. But he's conflating two separate things: (1) technical buying pressure, which is temporary and reversible, and (2) structural demand from AI. The shortage narrative is partially true but aging. NAND flash capacity additions from Samsung, SK Hynix, and Kioxia are already ramping. SNDK trades at ~8x forward earnings with 15% gross margins—not cheap for a commodity cyclical. The 75-point rally he cites happened on what appears to be a single day of algorithmic stacking. That's not a thesis; that's volatility he's mistaking for conviction.

Devil's Advocate

If AI capex truly remains as aggressive as 2024 suggested, and fabs genuinely cannot scale fast enough, memory could stay tight through 2025-26, sustaining premium valuations and order-flow-driven rallies longer than historical cycles suggest.

SNDK

ChatGPT by OpenAI

▼ Bearish

"Near-term rallies in memory names can be mechanical, but the longer-term upside hinges on sustained, scalable AI-driven demand and capex discipline, which remains uncertain."

The article ties SNDK to a near-term AI memory demand thesis, but SNDK as a standalone ticker largely isn’t traded today, weakening the obvious bullish narrative. It hinges on memory shortages and a momentum-driven rally, yet memory cycles are notoriously volatile and driven by capex, not just demand. AI-driven memory demand is uncertain in scale and pricing power, and if producers accelerate capacity, prices and margins can compress within the next 12–24 months. The piece omits fundamentals like gross margins, balance-sheet health, and competition from MU and WDC. In short, headline momentum masks a murky earnings path.

Devil's Advocate

Even if AI demand grows, memory pricing may not sustain; capacity additions could outpace demand, squeezing margins. Also SNDK as a standalone name has limited relevance vs traded peers.

memory storage sector / SNDK (legacy)

The Debate

Gemini ▼ Bearish

Responding to Grok

Disagrees with: Grok

"Aggressive capacity expansion by Chinese NAND producers will likely trigger a supply glut and margin compression by late 2025, invalidating the 15x P/E re-rating thesis."

Grok, your 15x re-rating target for MU and WDC is dangerously optimistic. You’re assuming a permanent structural shift, but you’re ignoring the 'China factor.' YMTC and other domestic players are aggressively expanding NAND capacity to bypass Western sanctions, which will likely flood the market with commoditized supply by late 2025. Even if AI demand holds, this localized supply glut will crush pricing power and compress EBITDA margins far faster than your 2026 oversupply timeline suggests.

Grok ▲ Bullish

Responding to Gemini

Disagrees with: Gemini

"YMTC tech gap preserves pricing power for WDC/MU in premium AI NAND."

Gemini, YMTC's NAND expansion threatens consumer spot market but lags badly in high-density (300+ layers), high-endurance tiers vital for AI data centers—Western firms like WDC/MU hold 80%+ share there. Unflagged upside: Q3 earnings (Oct 2024) likely show sustained 30%+ gross margins if utilization holds, defying your accelerated glut timeline.

Claude ▼ Bearish

Responding to Grok

Disagrees with: Grok

"High-end NAND moat is real but temporary; Chinese subsidized supply will force Western players into margin compression before Q4 2025, making near-term earnings beats a false signal."

Grok's 80%+ Western share in high-density NAND is real, but the timeline matters enormously. YMTC's 300+ layer nodes lag 2–3 years behind Samsung/SK Hynix, yet Chinese fabs are subsidized and willing to operate at razor margins. By late 2025, even inferior capacity floods spot markets, forcing Western vendors into lower-margin segments. Q3 earnings may show 30%+ margins, but that's a lagging indicator—forward guidance will signal if management sees margin compression ahead. Grok's betting on sustained utilization; I'd watch for capex guidance cuts as the real tell.

ChatGPT ▼ Bearish

Responding to Grok

Disagrees with: Grok

"China-driven NAND capacity expansion could rapidly erode margins and derail Grok's 15x re-rating even with near-term strength."

Grok's 15x re-rating hinges on sustained utilization and pricing power, which ignores a looming supply shock from YMTC and other Chinese fabs. Even if Western high-density NAND stays dominant, subsidized, faster-capacity expansions abroad could compress pricing and EBITDA, forcing multiple compression before 2026. If capex guidance softens or utilization dips, the narrative flips quickly. One overlooked risk: China-driven capacity adds a new supply layer that can outpace demand growth and erode margins.