During the October 7 episode of Mad Money, a caller said they had been averaging down on Western Digital Corporation (NASDAQ:WDC) but remained significantly underwater. They asked whether to wait for a recovery or sell. Jim Cramer replied:
Well, okay, Western Digital’s up 135% for the year. So, when you see that, you say to yourself, “Wow, I mean, like, either I missed it, or easy money’s been made.” But the way I look at Western Digital is: it’s not as good as Micron. Micron’s much cheaper. We know Micron really well here. We like it a lot. We think it could go much higher. I’m a swapper of Western Digital, which I did at one point own almost 5% of… That’s when I was able to own stocks… It looks really good. But Western Digital is not as good as Micron.
Cramer’s preference does not mean Western Digital lacks bullish backing. Both companies appeared in a screen of Reddit-trending stocks with substantial analyst-implied upside, although they occupied different positions in the ranking.
Two Different Ways to Benefit From Growing Data Demand
Western Digital Corporation focuses on hard disk drives following the separation of its flash business into Sandisk. Micron Technology, Inc. (NASDAQ:MU) manufactures semiconductor memory and storage products. Both serve growing data requirements, but their products and manufacturing economics differ.
Western Digital’s fiscal fourth-quarter revenue increased 44% year-over-year to $3.75 billion. Adjusted earnings reached $3.56 per share, while free cash flow was approximately $1.28 billion. Management projected fiscal first-quarter revenue growth of 42% to 49%, highlighting that the company’s operating outlook remained strong despite the caller’s disappointing investment experience. Western Digital’s rally also placed it near the top of a three-year ranking of AI-linked stock returns. The accompanying coverage highlighted a supply imbalance that could help explain more than just rising sales.
Micron reported fiscal fourth-quarter 2024 revenue of approximately $54.23 billion, compared with $11.32 billion a year earlier, and adjusted earnings of $33.42 per share. Its customer agreements also provide greater visibility. Management reported approximately $150 billion of remaining performance obligations under agreements containing committed volumes and defined pricing arrangements. These commitments extend beyond a single quarter and should not be confused with immediate revenue. Those agreements are central to Cramer’s argument that Micron deserves a different investment lens. How far they change its exposure to the memory cycle remains the more consequential question.
Earnings Multiples Support Cramer’s Comparison
Micron Technology, Inc. trades at approximately 5.9x forward earnings, compared with 19.4x for Western Digital Corporation. That supports Cramer’s statement that Micron is cheaper on expected earnings, although the companies are not interchangeable competitors. The discount also depends on the earnings estimates being achieved. A forward multiple describes the price relative to forecast profits. It does not establish how durable those profits will be.
Capacity Spending and Product Execution Remain Important
Micron Technology, Inc.’s expansion requires substantial investment. Fiscal fourth-quarter capital expenditures were approximately $10.8 billion, and management said it was increasing investment in technology, products and manufacturing. Strong demand supports that spending, but future returns depend on customers continuing to require the additional capacity.
Western Digital Corporation identifies competitive pricing, demand volatility, reliance on a limited number of qualified suppliers and the introduction of new storage technologies among its risks. Its latest growth figures do not remove the need to keep improving products while protecting margins. The longer-term storage case also extends beyond today’s cloud workloads. Coverage of Western Digital among second-half 2026 stock picks explored an emerging AI application that could add another source of demand.
Hedge Funds Added Both Stocks
Insider Monkey’s database showed 98 hedge funds holding Western Digital in Q2, up from 83 in Q1. Micron’s count increased to 184 from 154. Both attracted broader fund participation, although Micron had considerably more holders. Short interest was 5.38% of Western Digital’s float and 2.45% of Micron’s, indicating a larger relative short position in Western Digital.
Cramer’s preference is easier to understand through the earnings comparison than through either stock’s past performance. Western Digital is still growing strongly, but Micron offers a much lower forward multiple. The decision rests on confidence in those future profits, rather than whether an investor can recover their original purchase price.
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