Apple Chief Executive Officer Tim Cook dropped a bombshell on investors during the company's latest quarterly earnings call, noting a "100-year flood" in memory chip pricing, suggesting a major event had occurred that upended all the company's usual analysis. This could be a major problem for Apple, as it has to raise prices just to maintain margins, potentially stretching already-indebted consumers and causing sales issues.
However, just because Apple may be struggling due to rising memory chip prices doesn't mean that investors will miss out on it. Instead, I'd suggest looking at memory chip companies to invest in, as they're the ones making a killing from rising prices.
Two that I think are well-positioned to cash in are Sandisk (SNDK -3.68%) and Micron (MU -0.44%). Each company has been on an absolute tear this year due to rising memory chip prices, and the trend could continue into 2027 if prices remain high.
Apple CEO Tim Cook. Image source: Apple.
Sandisk and Micron are making a fortune from rising memory prices
Sandisk and Micron each fabricate memory chips. However, Sandisk focuses only on NAND memory, while Micron produces both NAND and DRAM. Both types of memory are used in Apple products and in data centers. DRAM memory is much faster but has a lower storage capacity. NAND memory is typically used for long-term data storage, although it isn't as fast as DRAM.
NASDAQ: MU
Key Data Points
Each chip type is vital in a wide variety of computing devices. Still, with data centers sucking up all of the memory chip production capacity, every electronic device is being affected by soaring prices.
Apple isn't the only company in a pinch, either. Amazon noted on its conference call that it was raising its 2026 capital expenditure forecast from $200 billion to $220 billion due to rising memory chip prices. That likely echoes sentiment across the board from various AI hyperscalers that are dealing with the same problem, but it's not a problem for Sandisk and Micron. Both companies are making a fortune from rising prices and increased demand.
Sandisk recently reported Q4 of fiscal year 2026 earnings (ended July 3) and delivered a jaw-dropping 372% year-over-year revenue growth rate. Even more impressive was a 51% quarter-over-quarter growth rate, showing that rising prices are still ongoing.
Sandisk noted that two-thirds of its revenue growth came from rising prices and only one-third from increased volumes. That's a major problem for companies like Apple and could persist in the future, as Sandisk expects revenue to continue rising at a rapid rate next quarter.
NASDAQ: SNDK
Key Data Points
During Micron's last earnings report, it noted that the tight memory chip market conditions will last beyond 2027. So, the memory chip market doesn't have a clear recovery in sight, and this problem will only get worse for Apple and other companies buying huge amounts of memory chips.
However, these two stocks are priced to rise soon.
Sandisk and Micron's stocks are cheap
Because the market is worried about the sustainability of chip demand, which typically endures a boom-and-bust cycle, the stocks are relatively cheap. Sandisk is priced at 6.3 times FY 2027 earnings -- a very cheap price tag considering its rapid growth.
SNDK PE Ratio (Forward) data by YCharts
Not to be outdone, Micron is priced at 5.7 times FY 2027 earnings (ending August 2027).
MU PE Ratio (Forward 1y) data by YCharts
With each stock priced this low, I wouldn't be surprised to see them rally through the end of this year and into 2027. A cyclical downturn could be coming, but it won't be until 2028 at the earliest. That leaves a lot of time for investors to make money on these two, and I think now is the perfect time to buy.
