degentrading
Former TradFi Options Market Maker, Delegate at Lido DAO
Sandisk should keep outpacing Micron as buybacks become memory's next big buyer. At its investor day, Sandisk said it expects to collect about $94B in value from eight clients and return 100% of excess cash to shareholders. Micron can't buy back stock until its CHIPS Act restriction expires Dec. 9, and Sandisk's emerging HBF product adds a tailwind as markets start to price it in. Onshore Korean investors are selling the memory rally while offshore money adds. x.comÂ
Sandisk's selloff on lower margin guidance is shortsighted, because moving memory from boom-and-bust into a more sustainable cycle is the main driver for re-rating the stock. Revenue of about $9B beat $8.6B and EPS of $39 beat $34. Guiding gross margin to 83-84.9% after 84.6% is sensible: at those levels, optimizing for volume and reducing cyclicality beats squeezing customers further. Expanded buybacks make the company itself the next buyer of its shares. x.com x.comÂ
Sandisk's fast-growing data-center revenue strengthens its case among memory names with upside. Data-center revenue rose 61% quarter over quarter; revenue of $11.03B, adjusted EPS of $49.51 and adjusted gross margin of 85.1% all exceeded estimates. For upside among Micron, Sandisk and Kioxia, Micron ranks first, then Sandisk, then Kioxia, until further guidance. x.com x.comÂ
Sandisk's earnings growth makes its valuation look unusually low, with guidance showing no slowdown. Revenue rose 378% year over year, and $52.5 GAAP EPS implies a 6.1 annualized P/E, below Micron's. Sandisk's roughly 85% gross margin also compares favorably with SK hynix's apparently sub-50% NAND margin. Next-quarter guidance calls for $12.2 billion-$12.6 billion of revenue and $55-$57 non-GAAP EPS. x.com x.com x.comÂ
Micron and SanDisk are a skip: DDR4 prices rising 50% quarter on quarter is already consensus, and both stocks have run on it. The surprise sits in legacy DRAM makers Nanya and Winbond, which are hard to access. The more promising gap is on the optical receive side, in photodiodes, InP substrates and germanium supply, rather than in crowded EMLs and switch optics. x.comÂ
Micron's cheaper forward valuation, stronger revenue growth and higher five-year ROIC make it the better buy than Sandisk, alongside its exposure to AI-driven HBM demand. Per StockAnalysis, Micron's revenue growth is 256% versus 175%, forward P/E is 5.12 versus 5.84, and five-year ROIC is 27.24% versus 21.47%. Sandisk leads on projected EPS growth, at 23.96% versus Micron's 17.16%. x.com x.com x.comÂ
Hynix's sold-out memory supply supports expectations for big numbers from Micron, still trading at 5x forward earnings. Hynix says its HBM and DRAM chips are sold out until 2029 and a chip shortage is likely to continue into 2030. Big numbers and capital return are expected after Micron reports in December. x.comÂ
Micron and Sandisk's current demand strength is already priced in. The market already knows today's demand is strong, after Micron said it "can't meet even half" of data center memory demand, per @PolymarketMoney. What matters is memory demand in 2028-2030 and beyond. x.comÂ
Micron's sold-out high-bandwidth memory through 2027+ and contracts already being signed for 2029-2030+ extend its earnings runway. At 5x forward earnings, it is cheaper than a year ago; its private Anthropic stake is about to be instantly rerated at Anthropic's IPO, and a new share buyback is expected to be announced Dec. 9. Micron could certainly gain 30% in three months. x.com x.comÂ
SanDisk CEO David Goeckeler's report of customer signals beyond fiscal 2030 adds storage to the long-duration AI hardware-demand case. He says those signals come through new-business-model partnerships; Micron and SK hynix in memory and Lumentum in photonics were already cited as signs of demand beyond 2030. x.comÂ
Memory stocks are at the peak of the cycle, and FOMO buying into Micron and SanDisk now could be one of the dumbest moves. Chinese factories are coming online at lightning speed, which is why Micron is signing multi-year deals, and pricing power is peaking right now. The market is forward-looking, so a low forward P/E matters little if net income drops 60-90% a few years out. Per Kalshi, the memory ETF just passed $25 billion in assets for the first time. x.com x.com x.comÂ
Micron, Samsung Electronics and SK hynix look very cheap if their long-term agreements do not impose overly conservative price ceilings. Greater clarity on those pricing terms could send memory stocks up 30% in a single day. x.comÂ
