Micron Technology (MU 3.21%) and Sandisk (SNDK 5.69%) have been flying high in the market in 2026, registering gains of 46% and 169%, respectively, as of this writing.
Both companies benefit from a common catalyst: booming memory demand from artificial intelligence (AI) applications, primarily in data centers. The demand for memory chips is so strong that manufacturers like Micron and Sandisk are unable to meet it, resulting in a sharp price increase. That's precisely why both companies are seeing a terrific surge in revenue and earnings.
Investors, however, may be wondering which of these two AI stocks they should put their money into right now, especially given the healthy upside they already delivered this year. Let's try to find the answer to that question.
Image source: Micron Technology.
The case for Micron Technology
Micron Technology makes dynamic random-access memory (DRAM) and NAND flash memory chips. DRAM is a type of volatile memory that's used for carrying out processing tasks in data centers, smartphones, personal computers, and other applications. It works only when the devices are switched on, and it temporarily stores data that's required for processing tasks.
NASDAQ: MU
Key Data Points
NAND flash, on the other hand, is a non-volatile memory type that's used for storing data without the need for power. So, while DRAM is used for computing applications, NAND flash is used to store the data on which computations are to be performed.
Micron gets 80% of its revenue from selling DRAM chips. The advent of AI workloads has created a need for larger, faster DRAM, known as high-bandwidth memory (HBM). This type of memory is used in AI accelerator chips such as graphics processing units, custom AI processors, and server central processing units.
As a result, the HBM industry's revenue is anticipated to jump by 58% in 2026 to almost $55 billion, according to Bank of America. Companies like Micron are allocating their production capacities toward more HBM to satisfy the need from data centers. This has caused a shortage of memory chips used in smartphones and PCs.
So the average price of DRAM has been increasing. Analysts at Bank of America estimate that the DRAM industry's revenue could jump by 51% this year, driven by a 33% increase in average selling price. Micron is winning big from this favorable end-market dynamic.
Data by YCharts; EPS = earnings per share.
Consensus estimates are projecting a 309% jump in the company's earnings in the current fiscal year to $33.92 per share. Given that the memory shortage is anticipated to persist through 2028, there is a solid chance that Micron's strong earnings growth will continue. As such, it seems poised to capitalize on the aggressive data center spending in the coming years to support AI workloads, suggesting it could continue to deliver more upside for investors.
The case for Sandisk
While Micron gets the majority of its revenue from the DRAM market, Sandisk is a NAND flash storage company that makes products such as solid-state drives (SSDs), storage cards, and embedded storage products for various applications.
NASDAQ: SNDK
Key Data Points
Just like Micron, Sandisk is also benefiting from AI-fueled demand for its flash storage products, especially SSDs deployed in data centers. Hyperscalers have been turning toward SSDs to meet the increasing storage demand in data centers to tackle AI workloads. As a result, the prices of flash storage products have skyrocketed.
According to one estimate, the AI-fueled storage market's value could grow from $34 billion in 2024 to almost $283 billion in 2033. So Sandisk's impressive momentum seems sustainable, which explains why analysts anticipate its top line to more than double in the current fiscal year, followed by another big increase in the next one.
Data by YCharts.
Meanwhile, its bottom line is expected to grow by more than 13 times in the current fiscal year, driven by potentially stronger NAND flash price increases this year compared to DRAM. Sandisk, for instance, is reportedly going to double the price of its 3D NAND flash memory in the current quarter as hyperscalers are willing to spend big bucks on flash storage chips.
This explains why Sandisk's earnings growth is poised to be substantially bigger than Micron's. And its stock has outpaced Micron on the market as well.
The verdict
It is evident that both Sandisk and Micron are capitalizing on similar growth drivers in the memory market, and both companies are poised to see terrific increases in revenue and earnings as a result. There isn't much separating them on the valuation front, either.
Data by YCharts; PE = price to earnings.
So, if you're looking to choose one of these two tech stocks for your portfolio to capitalize on the heavy investments in AI data centers, you can't go wrong with either Sandisk or Micron. Both companies trade at attractive valuations and are growing at a healthy clip, setting them up for more gains following a strong start to the year.
