Memory chip stocks Micron (MU) and SanDisk (SNDK) moved lower again in early trading on Tuesday, extending the recent selloff in AI memory stocks. Even so, top Melius Research analyst Ben Reitzes said he still feels “incrementally good” about memory and AI chip companies as strong AI demand continues driving tight supply across the sector.
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High conviction on SNDK? Try Tradr's SNXX or SNDQReitzes raised his price target on Micron stock to a Street-high $1,100 from $700, implying about 61% upside. The analyst also lifted his SanDisk target to a Street-high $2,350 from $1,500, suggesting roughly 76% upside from current levels. Meanwhile, he kept Buy ratings on both companies and also raised long-term estimates for other AI-related “bottleneck stocks,” including AMD (AMD), Intel (INTC), and Marvell Technology (MRVL).
Why Melius Is More Bullish on Memory Stocks
According to Reitzes, Wall Street may still be treating memory companies like highly cyclical chip stocks, even though AI demand is making the business more stable. The analyst said major cloud companies are now signing long-term supply deals and making upfront payments to lock in memory supply, helping make future revenue more stable and easier to predict.
Reitzes also believes AI-driven supply bottlenecks could help semiconductor companies gain more market value and upside than many software companies and non-chip ‘Magnificent Seven’ firms over the long term.
Micron’s AI Memory Supply Is Tight
One of the biggest reasons behind Melius’ bullish Micron view is the company’s high-bandwidth memory (HBM) business. According to the report, Micron’s HBM supply is already sold out through calendar year 2027, giving the company strong pricing power and helping support profit margins.
Meanwhile, Reitzes said enterprise AI data centers are now becoming the main growth driver for flash storage demand, replacing older markets like smartphones and PCs. That trend could continue supporting strong demand for companies like SanDisk through the rest of the decade.
Which Chip Stock Is the Best Buy?
Currently, both Micron and SanDisk carry Strong Buy analyst consensus ratings from Wall Street. However, analysts currently see upside potential of about 10% in SanDisk stock, while Micron’s average analyst price target suggests slight downside from current levels.
