The month of July hasn't been kind to some of 2026's biggest winners. It seems there was a widespread notion that investors should take some gains off the table after an incredible first half of the year.
Sandisk (SNDK -6.37%) and Micron Technology (MU -5.85%) were two of the best-performing S&P 500 stocks to start the year. Through June 30, Micron's stock rose 304%, while Sandisk's increased a jaw-dropping 858%. That's a lot of money made in a very short amount of time, so taking profits is likely a logical choice.
However, the sell-off has been incredibly harsh to these two. Since the calendar flipped to July, Micron has fallen 20%, and Sandisk is down over 35%. That's a significant sell-off, but the question is: Is this the start of an even bigger sell-off, or are these two smart stocks to buy on the dip?
Image source: Getty Images.
Both companies are seeing a major boost in their business
Both Micron and Sandisk are memory chip fabricators. The memory chip industry has been overwhelmed by demand from the artificial intelligence data center build-out, and doesn't have the production capacity to fulfill every order. As a result, prices for memory chips have skyrocketed.
Micron and Sandisk are beneficiaries of this, as their products' prices rose dramatically without needing to change input costs. That's a huge catalyst for both, but which one is better positioned to take advantage of it?
NASDAQ: MU
Key Data Points
Two primary types of memory used in data centers are DRAM and NAND. DRAM is high-speed memory used in computing units like GPUs. NAND memory is better for long-term information storage and is usually used in a solid-state drive (SSD) to create massive data storage banks for these data centers.
Micron makes both NAND and DRAM, while Sandisk only produces NAND. Furthermore, with most AI hyperscalers focusing on computing capacity rather than storage (though they still need a lot of it), exposure to the computing unit side of the business makes Micron a more attractive investment.
Winner: Micron
Sandisk is expected to grow faster
Sandisk's fiscal 2027 year began in July, and Wall Street analysts expect 151% revenue growth for the coming year. That comes after an already impressive 2026, when Wall Street expects 170% growth. Micron's fiscal 2026 concludes in August, and Wall Street projects 247% growth during fiscal 2026. However, that figure falls to 84% growth for fiscal 2027.
Both companies are rapidly growing and will likely continue to grow for some time. Wall Street analysts are far more bullish on Sandisk's 2027 prospects than Micron's, so I'm giving it the edge here.
Winner: Sandisk
NASDAQ: SNDK
Key Data Points
Both companies are cheap
We'll also use fiscal 2027 earnings projections to value each company since Sandisk is already in it, and Micron is rapidly approaching the start of a new fiscal year. Sandisk's valuation topped out at over 30 times forward earnings at the end of its fiscal year, but when 2027's projections are used, it's now back to less than 7 times forward earnings.
SNDK PE Ratio (Forward) data by YCharts
Micron is also valued in the same range, trading for less than six times forward earnings.
MU PE Ratio (Forward 1y) data by YCharts
The reason why these two are so cheap is that the market doesn't know the future. The memory chip market is known to be cyclical, with boom-and-bust cycles. We're clearly in a boom cycle right now, but the question is, for how much longer?
Micron's management team offered some insight into this question during its last earnings report, stating that tightness in the memory chip market will last beyond 2027. That bodes well for both companies, and I think the growth case will last for several years, leading to huge upside for both of these stocks.
Because it is the cheaper stock when next year's growth is factored in, I think Micron is the better stock to buy overall, although there's still nothing wrong with Sandisk, either.
Winner: Micron
