TLDR
- Jim Cramer named SanDisk, Seagate, Micron, and Western Digital as memory stocks still worth buying despite big 2026 gains
- He says AI data centers have created a persistent memory shortage, keeping supply tight
- All four companies have shifted to building only to order, rather than expanding capacity speculatively
- Large share buyback programs are returning cash to shareholders instead of funding new production
- Cramer favors Micron most and his Charitable Trust recently opened a new position in the stock
Jim Cramer said Monday that four memory stocks still have room to run, even after posting some of the biggest gains on the market this year.
Speaking on CNBC’s “Mad Money,” Cramer named SanDisk, Seagate, Micron, and Western Digital. Year-to-date returns for the group have been steep: SanDisk is up 653%, Seagate 261%, Micron 254%, and Western Digital 211%.
Cramer’s argument is built on supply and demand. AI data centers need large amounts of memory, and supply has not kept up. He pointed to Elon Musk’s comments on X describing memory as the main bottleneck to data center expansion.
Memory Makers Shift Strategy
The companies have also changed how they operate. Instead of ramping up production to chase volume, they are now building only to fulfill existing orders under longer-term contracts. Cramer said this behavioral shift is key to why the sector may not repeat its historical boom-and-bust pattern.
“They are basically building only to suit,” Cramer said. He added that bringing a new chip fabrication facility online takes years, making a rapid supply surge unlikely in the near term.
Share buyback programs are another part of his case. SanDisk holds $15.5 billion in buyback capacity, Seagate is working through a $5 billion program launched last year, and Western Digital added $4 billion to its repurchase plan earlier this year.
Micron Is Cramer’s Top Pick
Of the four, Cramer said Micron is his preferred name. His Charitable Trust, the model portfolio for CNBC’s Investing Club, opened a new stake in Micron last week after the stock pulled back alongside South Korean semiconductor names.
“I think Micron can double again before the boom comes to an end,” he said, adding the caveat that a data center slowdown would change that outlook.
That pullback continued into Tuesday. Micron shares fell 4.7% in premarket trading to $963.79, breaking back below the $1,000 level the stock crossed the day before. SK Hynix dropped 5.1% in the U.S. premarket, and SanDisk fell 5.5%.
The move was tied to rising bond yields, which pressured chip stocks broadly amid concerns over Middle East tensions.
Despite the Tuesday dip, Wall Street analysts have an average price target of $1,549 on Micron, according to FactSet. The stock has gained more than 700% over the past 12 months.
Cramer did flag risks. A slowdown in data center construction or a wave of new capacity from a competitor like Samsung could end the rally. He said he is aware he is not early to this trade, but does not believe he is late either.
“Sometimes the opportunity is too great and you can’t afford not to take it,” he said.
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