Acción de Micron vs. Acción de Sandisk: Una es una compra mucho mejor, según un analista de Wall Street

Key Points

Semiconductor companies Micron and Sandisk are benefiting from a memory chip supply shortage, but CJ Muse at Cantor Fitzgerald sees Sandisk as the better buy.

Micron is gaining market share in high-bandwidth memory (HBM) due to its industry-leading HBM3E technology, but the stock trades at a somewhat pricey valuation.

Sandisk is gaining market share in NAND flash memory due in part to cost efficiencies realized through its joint venture with Kioxia, and the stock trades at a more reasonable price.

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The proliferation of artificial intelligence (AI) has been a tremendous catalyst for memory chip makers Micron Technology (NASDAQ: MU) and Sandisk (NASDAQ: SNDK). Their share prices increased 571% and 3,350%, respectively, in the past year.

Despite that rapid price appreciation, CJ Muse at Cantor Fitzgerald says both stocks remain undervalued, though his target prices imply Sandisk is a much better investment today.

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• Muse values Micron at $700 per share, implying 29% upside from the current price of $542.
• Muse values Sandisk at $1,800 per share, implying 52% upside from its current price of $1,187.

Here's what investors should know about these semiconductor stocks.

Micron Technology: 29% upside implied by Cantor Fitzgerald’s target price

Micron manufactures memory chips and storage products for smartphones, personal computers, automotive systems, and data centers. It is the third-largest supplier of DRAM memory, which includes high-bandwidth memory (HBM), and NAND flash memory, per Counterpoint Research.

Data centers optimized for artificial intelligence need far more memory than traditional data centers, and insatiable demand has led to a supply shortage the likes of which the industry has never seen. Consequently, DRAM and NAND contract prices have increased about sevenfold over the past year, according to The Wall Street Journal.

Micron reported impressive second-quarter financial results. Revenue increased 196% to $23.8 billion and non-GAAP (adjusted) net income increased 682% to $12.20 per diluted share. CEO Sanjay Mehrotra said, "AI hasn't just increased demand for memory, it has fundamentally recast memory as a defining strategic asset in the AI era."

Investors have good reason to be optimistic. HBM feeds data and models to GPUs at very fast speeds, which makes it critical for AI workloads. Micron gained 12 percentage points of market share in HBM over the past year, and the company is likely to keep gaining share because its HBM3E is the fastest and highest-capacity HBM on the market.

As a caveat, memory chip sales are notoriously cyclical. The industry is currently in an upswing, but history says the supply shortage will eventually become a supply glut, at which point memory prices (and Micron's earnings) will probably fall. Wall Street expects the tide to turn around fiscal 2029, but no one actually knows when the current cycle will peak.

Wall Street's consensus estimate says Micron's adjusted earnings will increase at 13% annually through fiscal 2029. That makes the current valuation of 25 times earnings look somewhat pricey. I think investors should wait for a better entry point before buying shares, or at least keep any new positions relatively small.

Sandisk: 52% upside implied by Cantor Fitzgerald’s target price

Sandisk develops storage devices based on NAND flash memory. Its products 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 an important part of the memory hierarchy needed to support AI workloads. They store training data and models until they are loaded into HBM. Sandisk is gaining market share in NAND memory due in part to a joint venture with Japanese manufacturer Kioxia, which provides the company with access to low-cost wafers that let it compete on price.

Sandisk reported stunning financial results for the third quarter of fiscal 2026 (ended in March). Revenue increased 251% to $5.9 billion, driven by particularly strong demand for data center storage solutions, and non-GAAP net income increased to $23.41 per diluted share, up from a loss of $0.30 per diluted share in the previous year.

"NAND flash is emerging as the only economically viable solution to deliver the capacity, performance, and efficiency required to keep models accessible for real-time inference at scale," said CEO David Goeckeler. "This shift in understanding the critical nature of our technology comes at a time when our product differentiation is strongest."

Sandisk is designing a new type of NAND called high-bandwidth flash (HBF) to address the performance gap between GPU speeds and memory bandwidth. HBF will load data and models into HBM more quickly. Sandisk announced the technology last year and plans to sample HBF memory in the second half of this year.

Wall Street estimates the company's adjusted earnings will grow rapidly through fiscal 2028, before falling sharply in fiscal 2029. Even so, the consensus estimate says earnings will increase at 25% annually during that period. That makes the current valuation of 38 times adjusted earnings look reasonable. I think CJ Muse is correct in saying Sandisk is the better buy at current prices.

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Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.