Micron vs. Sandisk: Which Stock Is the Better Buy for the AI Memory Boom?

Outside of electricity and processing power, one of the biggest bottlenecks controlling the pace of the artificial intelligence infrastructure build-out is the amount of memory chips and data storage solutions available. Demand far exceeds supply right now, and that has allowed both Micron Technology (NASDAQ: MU) and Sandisk (NASDAQ: SNDK) to thrive.

Each offers different solutions, but both have been and can continue to be beneficiaries of the AI memory boom.

Image source: Getty Images.

The recent sell-off

Before weighing these two stocks against each other, it's worth mentioning the recent volatility that AI stocks, particularly memory stocks, have experienced. There was no single primary piece of news that weighed on the companies; rather, a collection of news items likely put pressure on Micron and Sandisk.

One broad concern is that higher inflation will persist. That prospect is prompting some investors to rotate out of high-growth stocks ahead of anticipated interest rate hikes. For industry-specific news, SK Hynix, another memory company that has done well this year, started selling off on the Korean Exchange, which may have sparked the fear that has trickled into U.S. markets. Also, SK Hynix is planning to list on the Nasdaq with a $29 billion stock sale. That provides U.S. investors interested in the memory space with a competing option, and the funds SK Hynix raises will help it expand its production capacity. Both of those factors may have contributed to investors' worries over the outlooks for Micron and Sandisk.

In addition, there may be some concern due to the cyclicality that the chip sector is known for, as well as just a bit of profit-taking that's adding to the volatility. Both have also recovered somewhat from last week's slide. As of the close of trading on June 30, Micron stock was up 303% year to date, while shares of Sandisk were up around 856%.

All of that is worth monitoring, but none of those factors preclude either Micron or Sandisk from being worthy of consideration as a long-term investment. Micron, for instance, believes the current memory chip shortage will persist beyond 2027, and it has locked in 16 long-term contracts for its products. That provides it with stable, recurring revenues, which should help offset worries over the cyclicality of the memory market. Sandisk is also locking in deals, with three contracts signed in its fiscal 2026 third quarter providing total contractual revenue of $42 billion.

From a garage to a $1 trillion-plus market cap

Outside of the fact that the garage where it began was not in Silicon Valley, Micron has a similar start-up story to many other long-established tech companies. Founded in 1978 in Idaho, Micron started as a four-person operation designing semiconductors.

It has been making memory and storage products since 1981, but relentless demand from data centers has been a game changer for the company. There has been such strong demand for the Micron products that are destined for AI servers that, in December, the company announced it would stop selling memory solutions for consumers to fully focus on the high-end data center market.

On June 24, it delivered its fiscal 2026 third-quarter report, and showed blowout top- and bottom-line figures. For the quarter, which ended May 28, Micron reported earnings per share (EPS) of $25.11 and revenue of $41.5 billion, easily beating EPS expectations of $20.78 and revenue expectations of $35.8 billion. What was particularly notable from the quarter was the performance from its cloud memory and core data center business units:

• Cloud memory revenue fiscal Q3 2025: $3.3 billion
• Could memory revenue fiscal Q3 2026: $13.7 billion
• Core data center revenue fiscal Q3 2025: $1.5 billion
• Core data center revenue fiscal Q3 2026: $11.5 billion

The spinoff success story

SanDisk was originally an independent publicly traded company, but Western Digital bought it in 2016 to get into the flash memory business. However, it spun that business back off into the markets as Sandisk in February 2025. Micron has a broader data storage product suite, while Sandisk's flash memory is used for more long-term storage than DRAM. But just like Micron, Sandisk is also benefiting from AI data center demand.

Revenue from its data center division is skyrocketing, as well as from its edge segment, which is used in AI processing and intelligent devices. Those gains showed up clearly in its fiscal 2026 Q3, which ended on April 3.

• Data center revenue fiscal Q3 2025: $197 million
• Data center revenue fiscal Q3 2026: $1.4 billion
• Edge revenue fiscal Q3 2025: $927 million
• Edge revenue fiscal Q3 2026: $3.6 billion

For its fiscal Q4, Sandisk expects revenue to land in a range between $7.7 billion and $8.2 billion. That would be a large bump from the $1.9 billion it reported in fiscal Q4 2025. In fact, it would be higher than the $7.3 billion in revenue it reported for all of fiscal 2025.

The winner of the AI memory battle

Both stocks have skyrocketed over the last year, so expecting them to keep climbing as fast as they have up till this point is likely a recipe for disappointment. Both still have upside potential, but investors should keep their expectations reasonable.

With that in mind, based on traditional metrics, Micron is the better value. It has a forward price-to-earnings (P/E) ratio of 7.5, while Sandisk's forward P/E is 31.7. The market is pricing in more upside for Sandisk, but it also has more earnings expectations to live up to.

Between the two, I would give the edge to Micron, as it can more easily surpass earnings expectations, has a more diversified product line, and operates a larger business. Micron generated $37.3 billion in revenue in its fiscal 2025, compared to $7.3 billion for Sandisk.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Western Digital. The Motley Fool has a disclosure policy.