SanDisk Corporation (NASDAQ:SNDK) and Western Digital Corporation (NASDAQ:WDC) are among the two hottest stocks on the market right now. The pair has benefited from the booming demand for memory storage devices used in AI data centers. Year-to-date, the two stocks are up by more than 400% and 100%. Over the past couple of months, Cramer has either called the firms speculative plays or remarked that they could go higher. In his morning appearance on August 17th, the CNBC TV host insisted that the two companies’ business was secular instead of cyclical and added that the shares might go even higher:
“If you’re selling SanDisk cause Tepper was selling SanDisk, I’m willing to go as far as to say you’re an idiot, Because, I think he rebought the position. And why? Because he’s a believer. As I am a believer. I just think that you can’t for the first time ever, I think that if something’s up 200%, you didn’t miss it. I’ve never felt that way. I do think that the data center is a, not cyclical, it’s secular. And that’s part of what’s happening with when you take a look at Seagate, Western Digital and Sandisk.
“I don’t know how Western Digital, doesn’t go higher. I know that’s a frightening concept, and people say, it’ll be a tweet, it’ll be like a twitter thing. You know Cramer, remember when Cramer said that like Seagate was going higher, what a bozo. But I don’t know what to say, I’m just saying that like Western Digital, which I at one point owned 5% . . .I mean, it’s up a 195%. And it may not be done. It may not be done. I do think tha the data center is a, not cyclical, it’s secular. And that’s part of what’s happening with when you take a look at Seagate, Western Digital and Sandisk.”
Cramer’s remarks about Western Digital Corporation (NASDAQ:WDC) and SanDisk Corporation (NASDAQ:SNDK) are at the heart of the debate surrounding the two firms. Tailwinds from the data center buildout sent SanDisk Corporation (NASDAQ:SNDK)’s fiscal 2026 data center revenue soaring by 437% annually, while its contracted revenue sat at $93.9 billion, courtesy of 10 discrete agreements. Yet, at the same time, a large portion of the revenue growth due to higher prices and a 30%+ dip in share price since June do carry warning signals and could spell trouble. Additionally, fiscal Q1 gross margin guidance predicted a slight dip over Q4 figures to indicate that pricing momentum might be moderating.
As for Western Digital Corporation (NASDAQ:WDC), the debate is mostly the same. While the two make different products, SNDK is NAND and WDC is HDD, their catalysts stem primarily from the data center buildout. The tailwinds for Western Digital Corporation (NASDAQ:WDC) are apparent from its 44% revenue and 100% EPS growth in the fourth quarter. This growth was accompanied by a strong free cash flow of $1.3 billion, with another catalyst being HDD’s suitability for storing large amounts of data for AI. Yet, at the same time, just as with SNDK, Western Digital Corporation (NASDAQ:WDC)’s 54.4% gross margin in Q4 could suggest that its pricing advantages are at a cyclical peak. Additionally, split-up costs from an upcoming spinoff could be a headwind.
Looking at hedge fund data, Western Digital Corporation (NASDAQ:WDC) lags SNDK as 83 hedge funds part of Insider Monkey’s database had held a stake in the firm in Q1, compared to 114 for WDC. Short interest as a percentage of float ranged between 7% to 8% for both firms, with the same being for forward P/E, which sat at roughly 25.
While Insider Monkey acknowledges the risk and potential of WDC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than WDC that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
