CNBC's Jim Cramer, a former hedge fund manager who earned returns of 24% annually during a 14-year period, recently talked about the unprecedented memory chip supply shortage that has caused stocks such as Micron Technology (MU +5.94%) and Sandisk (SNDK +7.70%) to skyrocket.
Micron has added 625% since January 2023, and Sandisk has advanced 1,050% since the company split from Western Digital in February 2025. But Jim Cramer says they still have room to run. "Can these stocks keep going higher?" he asked rhetorically. "The answer is yes, in large part because we don't have enough equipment to expand production of these chips."
Here's what investors should know.
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Micron Technology
Micron develops memory and storage solutions for personal computers, mobile devices, data center servers, and automotive systems. The company sells DRAM (dynamic random access memory) products, including high-bandwidth memory (HBM) created by stacking DRAM chips, and NAND flash memory products.
Importantly, Micron is not the market leader in DRAM or NAND products, but the company is gaining market share in both categories and its primary competitors (Samsung and SK Hynix) are losing market share. Particularly important, Micron gained 10 percentage points of market share in HBM over the past year. HBM is critical for artificial intelligence (AI).
Micron reported impressive financial results in the first quarter of fiscal 2026 (ended Nov. 27), beating expectations on the top and bottom lines. Revenue increased 20% to $13.6 billion, non-GAAP gross margin expanded 17 percentage points in a clear display of pricing power, and adjusted earnings increased 167% to $4.78 per diluted share.
CEO Sanjay Mehrotra mentioned the supply shortage created by demand for AI. "Over the last few months, our customers' AI data center buildout plans have driven a sharp increase in demand forecasts for memory and storage," he said in prepared remarks. "We believe that the aggregate industry supply will remain substantially short of the demand for the foreseeable future."
Wall Street expects Micron's earnings to increase at 37% annually through fiscal 2029. That makes the current valuation of 32 times earnings look reasonable. I agree with Jim Cramer. Investors should consider buying a small position in this stock today.
NASDAQ: SNDK
Key Data Points
2. Sandisk
Sandisk designs and manufactures data storage devices based on NAND flash technology. Importantly, hard drive disks (HDDs) are cheaper but slower and more fragile, while NAND-based solid-state drives (SSDs) are more costly but faster and more resilient. NAND flash memory is used for AI workloads when performance is the top priority, such as training and inference workflows.
Sandisk gained 2 percentage point of NAND market share during the 12-month period that ended in June 2025. The company still ranks fifth, but industry leaders Samsung, SK Hynix, and Kioxia lost at least 2 points of market share. The only other notable share gainer was Micron, according to Counterpoint Research.
Sandisk reported financial results for the first quarter of fiscal 2026 (ended Oct. 3) that beat estimates on the top and bottom lines. Revenue increased 23% to $2.3 billion, fueled by strong sales growth in the data center and edge (personal computers and mobile devices) segments. But non-GAAP earnings still dropped 33% to $1.22 per diluted share.
However, management estimates non-GAAP earnings will nearly triple sequentially in the second quarter. And investors have good reason to think Sandisk will keep gaining market share in NAND flash memory. Two hyperscalers recently began testing its enterprise SSDs, while a third hyperscaler and major storage OEM plan to start testing its SSDs this year.
Wall Street estimates Sandisk's adjusted earnings will increase at 79% annually through fiscal 2029. That makes the current valuation of 170 times earnings look very expensive. Indeed, Sandisk shares have increased 1,050% since being spun off from Western Digital in early 2025. In my opinion, the stock is too hot to touch after that extraordinary run.
