SanDisk Corporation (NASDAQ:SNDK) hosted its “In Focus” 2026 Investor Day on August 13, reinforcing its case as an interesting AI infrastructure story. Not only did the company unveil a massive $93.9 billion customer backlog, but also gave investors a new way to think about Micron Technology, Inc. (NASDAQ:MU).
On August 17, BofA reiterated its ‘Buy’ rating on Micron with a $1,550 price target, asserting how Sandisk’s recent analyst day may suggest that the memory industry may be entering a more durable phase.
SanDisk is Trying to Break the Memory Cycle
Historically, memory has been a cyclical business. Prices and margins are pushed higher by strong demand and tight supply, attracting additional capacity until an oversupply eventually drives prices back down.
However, the firm believes that Sandisk’s recent event is pointing toward a more durable phase for the industry. On its investor day, the company projected revenue to grow at a mid-to-high-teens percentage rate from fiscal years 2028 to 2030, backed by robust demand amid rapid AI infrastructure buildout.
According to finance chief Luis Visoso, Sandisk expects adjusted gross margins to remain at around 80% over the same period. These numbers are majorly supported by Sandisk’s customer commitments and supply discipline, the firm noted. Sandisk has signed eight customers to New Business Model agreements, or NBMs. These are multiyear supply deals with committed volumes and structured pricing, allowing it to better align customer demand with capacity.
BofA Applies the SanDisk Framework to Micron
Based on Bofa’s analyst note, the read through for Micron is potentially larger. The firm anticipates Micron would generate around $200-$250 in EPS by 2030 when applying the Sandisk-like model, implying an EPS CAGR of more than 30% between fiscal 2026 and 2030.
In contrast, consensus expectations for the next two years stand around $160-$170 in peak EPS. The bull case for Micron is that it is currently benefiting from a shortage of memory chips, granting it significant pricing power. For the third quarter of fiscal year 2026 ending May 28, Micron’s revenue was $41.46 billion, 346% higher compared to the year-ago period. It’s earnings per share (EPS) were $25.11, 1215% higher than the year-ago period.
The company has been signing multi-year strategic agreements, which management believes could improve the durability and predictability of its financial performance.
The firm noted significant upside potential even at MU’s historical 10x P/E multiple.
“If earnings volatility proves structurally lower, a re-rating toward 12x-15x P/E, more consistent with AI infrastructure beneficiaries, becomes increasingly defensible.”
However, the bear case for Micron still stands, particularly amid concerns about the sustainability of high spending on AI infrastructure and rising competition from South Korean and Chinese memory companies.
The firm has also flagged a prominent risk, which is capital deployment. The question posed by the firm is whether Micron returns its mounting cash hoard to shareholders or redirects it toward broader ecosystem investments.
SanDisk’s Targets Are Not Micron’s Guidance
While Bofa is of the view that SanDisk’s “durable growth outlook” offers evidence that the broader memory market may be moving into a structurally stronger period, it must be noted that Sandisk’s targets are not Micron’s guidance.
Sandisk and Micron are different companies working in different competitive environments. Sandisk’s own ambitious targets particularly rely on forward-looking expectations regarding AI infrastructure demand, long-term customer contracts, and stable currency and cost dynamics. These projections, management has acknowledged, are subject to underlying variables and market risks.
Institutional/Hedge Fund Sentiment
Institutional interest in Micron and Sandisk remains substantial. According to Insider Monkey’s database, 154 hedge funds held Micron at the end of the fiscal first quarter, up from 137 in the prior one. Sandisk was held by 114 hedge funds, up from 75 in the previous one.
As of late July, Micron had a short interest of roughly 29.89 million shares, representing 2.65% of the public float. Meanwhile, Sandisk’s short interest represents 4.6% to 5.35% of its public float. While bears are minimally skeptical of Micron, the bear case for Sandisk, although limited in itself, remains comparatively higher.
Overall, Sandisk’s long-term targets are supportive of the idea that the memory market could become more stable and durable. If Micron benefits from these trends, earnings could rise much more than expected. However, the broader risk lies in falling memory prices and margins, particularly if the industry returns to its boom and bust cycle.
While we acknowledge the risk and potential of MU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MU and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: Apple Could Hit $400, But AI Is Coming for Its Most Profitable Business and IREN’s $100 Bull Case Hinges on a 5-10x AI Cloud Advantage
Disclosure: None. Follow Insider Monkey on Google News.
Hedge Fund Resource Center