Best Memory Stock to Buy: Micron or SanDisk?

Key Points

Micron and SanDisk have delivered impressive gains over the past 12 months. Both companies are positioned for strong growth due to rising demand for their memory products. While many investors would be thrilled with a stock that quadruples over 10 years, some have seen even more dramatic gains in just 12 months. Among the S&P 500, six stocks have performed exceptionally well, with Micron Technology and SanDisk being two of the standout performers.

Micron's shares have surged more than 300% over the last year, while SanDisk's stock has increased by an impressive 10 times. Now, the question is which of these memory stocks is the better investment at this time. Let's take a closer look at both companies.

The Case for Micron

Micron produces a variety of memory types, including dynamic random-access memory (DRAM), NAND flash memory, and high-bandwidth memory (HBM). The company has been highly successful across all these areas.

In the first quarter of 2026, Micron reported record DRAM revenue of $10.8 billion, representing a 69% increase year-over-year and a 20% rise quarter-over-quarter. The demand for DRAM chips is outpacing supply, with Micron struggling to meet the needs of its customers. This trend is also evident in the NAND flash market, where Micron saw Q1 revenue reach $2.7 billion, up 22% year-over-year and sequentially.

Micron's HBM business is particularly promising. The company has completely sold out of HBM supplies for 2026 and expects the total addressable market for HBM to grow at a compound annual rate of around 40% through 2028, reaching $100 billion. HBM is crucial for AI chips, and Micron's HBM3E chips use 30% less power than those of its competitors.

Recent reports suggested that Nvidia is using HBM4 from Samsung and SK Hynix for its Vera Rubin GPU/CPU platform. However, Micron is still expected to be a key supplier for Nvidia's Rubin CPX GPUs. The company should also have no trouble finding other buyers for its HBM beyond 2026.

Despite its strong growth potential, Micron's stock is currently undervalued, trading at only 11.5 times forward earnings. This low valuation is largely due to Micron's reputation as a cyclical stock. However, the current upward cycle in memory seems likely to continue for the foreseeable future.

The Case for SanDisk

SanDisk focuses primarily on NAND memory, which is essential for data storage. The company benefits from the massive storage requirements of large language models (LLMs), giving it significant pricing power.

Like Micron, SanDisk is experiencing a supply-demand imbalance. CEO David Goeckeler expects this trend to continue beyond 2026. In SanDisk's latest quarterly update, he stated that customers are proactively seeking long-term commitments due to the critical nature of the company's technology.

SanDisk's revenue increased by 61% year-over-year and 31% quarter-over-quarter in its fiscal 2026 second quarter. The company anticipates that Q3 revenue will rise more than 50% sequentially at the midpoint of its guidance range.

Looking ahead, SanDisk's future appears bright. The company recently partnered with SK Hynix to standardize High Bandwidth Flash (HBF), a next-generation memory solution for AI inference.

SanDisk's forward price-to-earnings ratio stands at 13.4, which is considered value stock territory. However, many investors may still be cautious about the stock due to its cyclical nature.

Better Memory Stock to Buy Now

When comparing Micron and SanDisk, I believe Micron is the better choice at this time. Its multi-year HBM contracts make it a less risky investment than in the past. However, given the state of AI in 2026, it may be wise to focus on the bottleneck you see as the biggest opportunity. Micron addresses speed challenges in AI processing, while SanDisk tackles storage challenges. Both companies could continue to be major winners.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.