Jensen Huang Told CES 2026 That Memory Is Now the Biggest Bottleneck in AI. Micron and Sandisk Have Outperformed Nvidia's Stock Ever Since.

CES, held annually in January, is one of the most important trade shows where tech companies go to unveil innovations and showcase bold ideas for the future.

At the 2026 event, Nvidia CEO Jensen Huang offered something that has been just as impactful: his insights about the growing memory needs of artificial intelligence (AI). And based on where the stock prices of Micron Technology (NASDAQ: MU) and Sandisk (NASDAQ: SNDK) have gone since then, his understand of the situation was right on the money.

Nvidia CEO Jensen Huang. Image source: Nvidia.

The AI memory crunch

Large language models are being asked to deliver on requests promptly, but there's also a growing expectation that these tools will preserve users' older requests and conversations as time savers to provide context for the new ones. That requires increasingly higher memory capacity in the data centers that power those AIs, which Huang alluded to in his January CES speech:

We would like this AI to stay with us our entire lives and remember every single conversation we've ever had with it, right? Every single lick of research that I've asked for. Of course, the number of people sharing the supercomputer will continue to grow. And so, this context memory, which started out fitting inside an HBM, is no longer large enough.

Over the last year, as Micron and Sandisk have kept reporting surging revenue figures in their respective quarterly reports, Huang's insight on the expanding demand for memory and storage for AI has proven true.

AI boosts revenue

In Micron's fiscal 2026 third quarter, it reported total revenue of $41.4 billion, which was a significant increase for the company; its full-year revenue in 2025 was just $37.3 billion. That rapid revenue growth is thanks to its cloud and data center divisions.

Data source: Micron.

Sandisk's top line is smaller than Micron's, but it's still growing significantly. Its total revenue in its fiscal 2026 third quarter was $5.9 billion, up 251%. Its data center and edge divisions (providing memory storage for things like drones and car sensors) have been key revenue drivers.

Data source: Sandisk.

Why sales can keep growing

The AI infrastructure build-out isn't expected to slow down anytime soon, and as long as it continues, demand for memory and storage chips will remain robust. But each of these companies is signing longer-term deals with customers that lock in prices and supply agreements for multiple years. This should eventually help them offset some of the cyclicity that the memory and data storage industry is known for.

Micron signed 16 strategic customer agreements in its fiscal third quarter, with cash deposits and financial commitments totaling $22 billion to date. Meanwhile, in its third quarter, Sandisk signed three contracts with total contractual revenue of at least $42 billion.

The stock prices for both have pulled back over the past few days, but those retrenchments came on the back of strong runs upward. Thus far in 2026, while Nvidia shares have climbed by 11%, shares of Micron have performed much better; Micron's stock price is up nearly 200%, while shares of Sandisk have skyrocketed by almost 500%.

The short term looks a little uncertain amid an AI sector sell-off. Still, as there appears to be no end in sight to the deep mismatch between memory and storage supply and demand, both stocks could keep rewarding investors over the next several years.

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