Everyone loves a winner. But when deciding between two winning growth stocks, should you choose the one with the most impressive recent performance? Many analysts seem to think so.
Micron technology‘s (NASDAQ:MU) Shares have soared more than 330% in the last 12 months. However, that gain pales in comparison to SanDisk‘s (NASDAQ: SNDK) 12x sizzling return. It’s no surprise that Wall Street likes SanDisk more than Micron. Should you?
Will AI create the world’s first billionaire? Our team just published a report on a little-known company called “Indispensable Monopoly” that provides critical technology that both Nvidia and Intel need. Continue “
Image source: Getty Images.
At first glance, you might think that Wall Street actually prefers Micron over SanDisk. An analysis of analysts’ stock recommendations suggests that is the case.
S&P Global(NYSE: SPGI) surveyed 20 analysts this month who cover SanDisk. Fourteen of them (70%) rated SanDisk a “buy” or “strong buy,” while the remaining six recommended holding the stock. However, 37 of the 43 analysts surveyed by S&P Global (86%) who cover Micron rate it a “buy” or better.
Is my claim that Wall Street likes SanDisk more than Micron incorrect? I don’t think so. In my opinion, analysts’ 12-month price targets are a better indicator of their sentiment than their ratings.
Wall Street’s 12-month consensus price target for SanDisk reflects a potential upside of 19%. What is the consensus opinion for Micron? Analysts’ average price target for the stock is slightly below the current stock price. I think it’s a clear sign that Wall Street favors SanDisk over Micron.
While both Micron and SanDisk are semiconductor stocks targeting memory chips, their businesses are quite different. Micron’s products include dynamic random access memory (DRAM), NAND flash memory, and high bandwidth memory (HBM). SanDisk only focuses on NAND memory.
Both companies are achieving solid growth. Micron’s revenue increased about 57% year over year in its most recent quarter. SanDisk’s revenue increased 31%.
Micron and SanDisk also enjoy similar pricing power due to significant imbalances between supply and demand for their respective products. Micron completely exhausted its supply of HBM by 2026. CEO Sanjay Mehrotra noted a “tight supply environment” that “will persist beyond calendar 2026” during the company’s first-quarter earnings conference call. This echoes SanDisk CEO David Goeckeler’s statement on his company’s recent quarterly call that SanDisk forecasts “customer demand to well outstrip supply beyond calendar year 2026.”
There is a common denominator behind Micron and SanDisk’s good fortune: sustained demand for AI chips. Micron’s HBM is critical to accelerating AI processing. NAND flash memory manufactured by both companies is essential to meeting the challenges of AI storage.
HBM could become even more important with increasingly powerful AI accelerators – good news for Micron. Meanwhile, SanDisk has partnered with South Korean memory chip maker SK Hynix to develop High Bandwidth Flash (HBF). This technology has the potential to become the next generation memory standard for AI inference.
An investor unfamiliar with Micron and SanDisk might be surprised to learn how low their valuations are. Micron stock trades at just 12.7 times forward earnings, while SanDisk’s forward price-to-earnings ratio is 15.8.
Micron’s lower valuation is one of the reasons I see the stock as a better pick than SanDisk, unlike Wall Street. However, a more important factor behind my preference for Micron is understanding because Both stocks have low forward earnings multiples.
Both Micron and SanDisk are cyclical stocks. Smart investors know that the current boom cycle will not be permanent. This cyclicality is the main reason I believe Micron’s diversification into multiple types of memory chips will be an advantage in the long term.
SanDisk has been the big winner in the last 12 months. But I suspect Micron will be like the tortoise in Aesop’s fable, “The Tortoise and the Hare,” albeit a particularly fast-moving tortoise. In the end, the tortoise won the race against the hare. I predict Micron will surpass SanDisk as well.
Before you buy Micron Technology stock, consider this:
He Varied and Dumb Stock Advisor The analyst team has just identified what they believe are the 10 best stocks for investors to buy now… and Micron Technology was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you would have $514,000!* Or when NVIDIA made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $1,105,029!*
Now, it is worth noting stock advisor the total average return is 930%: An overwhelming outperformance of the market compared to the S&P 500’s 187%. Don’t miss the latest Top 10 list, available with Stock Advisorand join an investing community created by individual investors for individual investors.
See the 10 actions »
*Stock Advisor returns starting March 16, 2026.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool holds and recommends Micron Technology and S&P Global. The Motley Fool has a disclosure policy.
Wall Street likes SanDisk more than Micron. Should you? was originally published by The Motley Fool
