Sandisk Is One of the Biggest Winners After Micron's Blowout Earnings
Key Points
Micron's earnings smashed guidance, confirmed strong sequential growth, and revealed multi-year customer contracts. Sandisk may do something similar in August.
Sandisk has recently delivered higher year-over-year and sequential revenue growth than Micron.
Sandisk's valuation has run up with the stock price, but it still looks compelling at current levels.
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Micron Technology's (NASDAQ: MU) fiscal 2026 third-quarter earnings left no doubt that the memory boom is still here. Not only did the company smash guidance, but it also told investors to expect more than 20% sequential growth for its fiscal 2026 fourth quarter.
Naturally, investors piled into Micron after earnings, but it's not the only winner. Sandisk (NASDAQ: SNDK) might be the better play post-Micron earnings, and investors should look with anticipation leading up to when Sandisk reveals its latest results in August.
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Sandisk is riding the same tailwinds as Micron
The broad catalyst for memory stocks is that artificial intelligence (AI) infrastructure requires memory chips and products so AI chips can manage large workloads and become more efficient. Sandisk's NAND flash memory chips have become a staple for AI infrastructure, just like Micron's high-bandwidth memory chips. Those products have helped Sandisk and Micron outpace the S&P 500 by a wide margin over the past year, but Sandisk actually has higher financial growth rates than Micron. That's a big deal after Micron's blowout earnings, and as August approaches.
Micron's fiscal 2026 Q2, which ended Feb. 26, 2026, is the most accurate comparable to Sandisk's fiscal 2026 Q3 results, which ended April 3, 2026. Micron delivered 196% year-over-year revenue growth in that quarter, compared to Sandisk's 251% year-over-year revenue growth.
Sandisk's 97% sequential growth in its fiscal 2026 Q3 also exceeded Micron's 75% sequential growth in its fiscal 2026 Q2. This scenario also played out in the previous quarter, showing an AI-fueled trend. If it continues again when Sandisk reports earnings in August, the stock can continue to rally despite gaining more than 600% year to date.
Sandisk's rising valuation reflects better fundamentals
A soaring stock price comes with a higher valuation, but in Sandisk's case, the fundamentals back it up. After the run-up, Sandisk trades at a 32.3 forward P/E ratio after having a 19.3 forward P/E ratio less than one year ago.
Micron's recent earnings suggest Sandisk can maintain or even exceed current growth rate projections that have warranted a 32.3 forward P/E ratio. Micron also said in its fiscal year 2026 third-quarter press release that it secured strategic customer agreements that offer revenue visibility for multiple years.
Those agreements further shatter the idea of a cyclical memory market. The fact that tech giants are agreeing to these types of deals implies that Sandisk may report similar multi-year agreements in August.
AI inference and agentic AI tailwinds should continue to heat up for multiple years. The tech is still new, AI data centers are being built across the country, and the world's largest companies keep throwing money at this revolutionary opportunity. Micron's earnings results show that the wins keep piling up, and Sandisk may report the same in August.
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Marc Guberti 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.
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