If it wasn’t clear before, there’s no denying it now: we’re in the middle of an AI memory chip gold rush. Two of the biggest beneficiaries so far are Micron (NASDAQ:MU) and SanDisk (NASDAQ:SNDK), both of which have seen revenue surge, profitability expand, and their stocks shoot to the heavens as demand for AI infrastructure continues accelerating.
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Trade SNDK with leverageMicron blew expectations out of the water with its latest fiscal Q2 2026 report, delivering revenue of $23.9 billion – up 75% sequentially and 196% year-over-year. Not only did that mark the largest sequential quarterly revenue increase in company history (+$10.2 billion), but the company’s guidance of $33.5 billion for the current quarter came in more than $10 billion above Wall Street’s expectations.
And it’s not just about revenue growth. As Micron’s high-bandwidth memory (HBM) technology becomes increasingly essential for AI workloads, demand has far outpaced supply. That imbalance has handed the company enormous pricing power, with Micron now expecting a gross margin of 81% for fiscal Q3 2026.
In response, MU shares have soared 777% over the past twelve months. As remarkable as that run has been, it still trails the staggering 4,162% rally posted by SNDK over the same time period.
SanDisk is also benefiting from intense demand for NAND flash memory, with the company delivering hockey-stick-style growth over the past year. Revenue and profits have surged well beyond historical levels as AI-related storage demand has exploded.
The company’s fiscal Q3 2026 revenue of $5.95 billion climbed 97% sequentially and 251% year-over-year, while its gross margin of 78.4% underscored an extraordinary level of profitability.
Both companies have clearly capitalized on the AI infrastructure boom. However, one investor, known by the pseudonym Alpha Analyst, believes only one remains the better long-term play.
“The preferred setup is remaining invested through a relative trade: long Micron for stronger AI-memory durability while hedging cycle and valuation risk with a short Sandisk position,” stated the 5-star investor.
According to Alpha Analyst, both MU and SNDK have entered “heated territory,” with valuations now reflecting “peak enthusiasm.” In the investor’s view, that leaves both vulnerable to a re-rating if AI capex growth begins slowing “even by a little bit.”
Still, while pricing strength remains robust across both businesses, Alpha Analyst expects storage pricing – the market where SanDisk operates – to become “less scarcity-driven” than the premium AI memory segment dominated by Micron.
The investor argues that HBM supply constraints are far more difficult to resolve because the bottleneck extends beyond wafer capacity. Advanced packaging limitations and lengthy qualification cycles create structural shortages in HBM and DRAM that are not easily fixed.
And, it’s not just the structural set-up that favors Micron, according to the investor, as SNDK’s forward EV-to-EBITDA multiple is roughly double that of MU (16.47x to 8.154x).
While Alpha Analyst doesn’t think a naked buy makes sense for either company at this point, the investor isn’t blind to the continued memory-buying binge. (To watch Alpha Analyst’s track record, click here)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.