Micron vs. Sandisk: Which Is the Better AI Memory Stock to Own for the Next 3 Years?

What's the hottest area for investors right now? A good argument could be made for artificial intelligence (AI) memory stocks. Shares of Micron Technology (NASDAQ: MU) have more than tripled so far in 2026. Sandisk (NASDAQ: SNDK) has delivered an even greater return, with its stock up close to 6X year to date.

But, as the fund disclosures say, past performance isn't necessarily indicative of future results. Which of these two AI memory stocks is the better pick to own over the next three years? Here's how Micron and Sandisk stack up against each other.

Image source: Micron Technology.

The case for Micron

Historically, Micron has been a cyclical stock with wild price swings. Its shares are still highly volatile, but the price swings have primarily been in one direction -- up.

There's a simple reason why that's the case. Demand for memory, particularly high-bandwidth memory (HBM), has gone through the roof so much that Micron and other manufacturers can't create enough supply to keep up.

Don't expect these dynamics to change anytime soon. Micron CEO Sanjay Mehrotra said in his company's fiscal 2026 third-quarter earnings call in June, "We expect tight conditions to persist beyond calendar 2027 as a result of AI-driven demand across all segments coupled with structural supply constraints."

The segments Mehrotra referred to include cloud memory, core data center, mobile and client, and automotive and embedded. Micron makes DRAM, HBM (which uses DRAM as a component), and NAND memory chips -- and all are enjoying strong demand.

What if the AI data center boom loses fizz? Micron expects another strong tailwind from humanoid robots. Mehrotra predicts that this nascent market will have a "sustained, substantial multi-decade memory demand cycle."

The case for Sandisk

Sandisk's 2026 performance is impressive, making it the biggest winner by far in the S&P 500 (SNPINDEX: ^GSPC). What's even more stunning is that the memory stock has skyrocketed roughly 3900% since it was spun off from Western Digital (NASDAQ: WDC) in February 2025.

Like Micron, Sandisk is riding the wave of a massive supply demand imbalance. AI data centers are gobbling up every bit of NAND memory they can get. That's because NAND flash has become the most cost-effective solution for large-scale AI inference (applying trained AI models to analyze real data).

Can this momentum last? Sandisk CEO David Goeckeler thinks so. He told analysts in the company's April 2026 earnings call that Sandisk now has "a durable growth model, a valuable franchise, and a business built to generate substantial, sustained cash flow."

Wall Street believes Sandisk has plenty of room to run. The consensus 12-month price target reflects an upside of over 50%. Of the 23 analysts surveyed by S&P Global (NYSE: SPGI) in August, 18 rated the stock as a "buy" or "strong buy."

Better AI memory stock to own?

I expect both of these AI memory stocks to deliver market-beating returns over the next three years. However, if I had to pick only one to own, I think the nod goes to Micron.

For one thing, Micron has a more diversified business than Sandisk. If demand for one type of memory slows, Micron could continue to grow. Size matters, too. Micron is roughly five times larger than Sandisk and ranks as the world's third-largest memory chip manufacturer by revenue.

Valuation is another consideration. Sandisk isn't expensive, with shares trading at below 19 times forward earnings. But Micron looks like a steal with a forward earnings multiple of only 5.3. The stock's price-to-earnings-to-growth (PEG) ratio, which is based on analysts' five-year earnings growth projections, is also an absurdly low 0.12.

Granted, if data center demand slows significantly, both of these stocks will be hit hard. I don't envision that happening over the next three years.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology, S&P Global, and Western Digital. The Motley Fool has a disclosure policy.