Why Sandisk Stock Just Popped
Key Points
Mizuho reiterated its buy rating on Micron today -- but Sandisk stock went up, too.
Both companies make HBF memory, but only Micron makes HBM.
Sandisk Corporation (NASDAQ: SNDK) stock soared 8.6% through 10:25 a.m. ET Tuesday on improved sentiment for semiconductor stocks -- and a big boost for its memory-chip archrival Micron (NASDAQ: MU).
You can thank Japanese megabank Mizuho for the boost.
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Mizuho loves memory stocks
Today's catalyst comes from Mizuho, which this morning reiterated its outperform rating and $800 price target on Micron. Citing strong demand for computer memory driven by the growth of artificial intelligence, Mizuho predicts the memory market will remain 30% to 50% undersupplied throughout 2026 and 2027, and the price of high-bandwidth memory, in particular, could surge 70% to 100% next year.
That's great news for Micron, of course -- but what does it mean for Sandisk?
What this means for Sandisk
After all, while Micron makes both DRAM chips (used to manufacture high-bandwidth memory (HBM) and NAND flash memory, Sandisk only makes NAND. Doesn't this mean that Mizuho's bullish HBM note is relevant only for Micron, and not for Sandisk at all?
Not necessarily.
Sandisk has an answer to Micron's HBM business, you see, and it's called High Bandwidth Flash, or HBF -- and just last week, Mizuho was talking about rising demand for HBF, predicting that this will also cause NAND supply to contract in 2027.
Granted, at the time, Mizuho was still talking about Micron. But this is a market where Sandisk can compete as well -- which probably explains why good news for Micron today is sending Sandisk stock higher.
And what it means for you
All this said, Sandisk stock does cost 50 times earnings, and Micron only 35x. On a day when Micron is being boosted, and Sandisk is just drafting off Micron's good news, the logical thing to do is buy Micron instead of Sandisk.
Sometimes, the easy decision is the right one.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.