Jim Cramer Says Micron Isn’t Going Away. Here’s Why He Picks It Over Sandisk
Yahoo! Finance ·
Key points
- Cramer publicly endorsed Micron over SanDisk during a CNBC segment, framing Micron as not going away and emphasizing its HBM exposure and NVIDIA collaboration as strategic advantages.
- Micron co-designs a custom HBM4E product with NVIDIA, touted by management as the first major custom HBM in the market, strengthening its position in AI memory demand.
- Micron’s fiscal Q4 2026 results surpassed expectations with revenue of $54.23 billion (vs. $50.97 billion expected) and non-GAAP EPS of $33.42, while gross margin expanded to 87.0%; full-year free cash flow totaled $62.31 billion.
- The company has 26 strategic customer agreements through 2030 covering about 35% of sales, contrasting SanDisk’s reliance on NAND through a Flash Ventures JV with Kioxia.
- SanDisk demonstrated stronger year-to-date gains and has higher near-term data center momentum, but Micron remains buoyed by AI memory demand and expanding margins, complicating a simple leadership verdict.
- Industry commentary includes concerns about cyclical memory demand, with Goldman Sachs and other bears noting potential data center pullbacks; Micron’s Idaho fab is slated to start wafers mid-2027, with new clean rooms online by 2028 and beyond.
- Management indicated DRAM remains the principal constraint to data-center cost and performance, with no clear visibility on when supply-demand balance will occur, suggesting tight conditions through 2028 and a gradual pricing dynamic thereafter.
Summary
Amid a rebound in AI memory stocks, Jim Cramer advocates for Micron over SanDisk, citing Micron’s exposure to high-value HBM memory and ongoing NVIDIA collaboration as key advantages. Micron has demonstrated accelerated revenue growth and a markedly higher gross margin, though the stock trades at a modest multiple of earnings, reflecting lingering cycle risks. The narrative emphasizes Micron’s diversified memory portfolio (DRAM, HBM, NAND), major customer contracts, and a looming supply expansion plan that could temper pricing power by the late 2020s. Looking ahead, investors will monitor NVIDIA’s HBM4E program progress, multi-year agreements, and Micron’s ability to sustain targets as supply ramps. The broader takeaway is that memory leadership in AI hinges on access to advanced memory, contract visibility, and timing of new capacity.
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