Shares of chipmakers Micron (MU) and SanDisk (SNDK) were falling in pre-market trading today as the selloff in technology stocks continued. Both stocks plunged more than 10% on July 1 as investors shifted money from high-growth technology stocks into more defensive sectors such as healthcare and consumer staples.
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Moreover, rising expectations of an interest rate hike this year have weighed on growth stocks. Today’s June jobs data will also likely shape the Federal Reserve’s next interest rate decision. Economists expect the U.S. economy to have added 115,000 jobs last month.
Outlook for Memory Chip Sector Remains Strong
Despite the recent pullback, analysts remain optimistic about the outlook for memory chip makers. Micron and SanDisk have been among the best-performing semiconductor names this year. MU stock is up nearly 262% while SNDK has surged 756%. The memory chip industry is highly cyclical, but this upcycle is being driven by tight supply and strong AI-related demand.
On Tuesday, KeyBanc analyst John Vinh said that tight memory supply and strong AI data center demand should continue supporting higher memory prices. As a result, he expects strong demand and favorable pricing for both DRAM (Dynamic Random-Access Memory) and NAND memory chips throughout 2026, helping Micron maintain solid profitability.
He added that in June, contract prices for DRAM rose about 3% from the previous month, while NAND flash memory prices increased 2.4%. The price gains reflect strong demand and tight supply across the memory market.
Meanwhile, China Renaissance analysts raised their price target on SNDK from $1,702 to $3,169, implying 55.9% upside potential from current levels. The analysts raised their earnings estimates after forecasting stronger NAND pricing, which should boost SanDisk’s profitability. The firm believes stronger industry fundamentals and AI-driven storage demand should continue supporting SanDisk’s earnings.
MU or SNDK: Which Is the Better Chip Stock According to Analysts?
Currently, analysts have assigned a “Strong Buy” consensus rating to both stocks. However, Micron offers greater upside, with an average price target implying 25.6% upside. In contrast, SanDisk’s consensus target suggests about 9.3% downside after its massive rally this year.
