Cramer: Memory Stocks Are Different This Time
SkimNews Take
If long-term supply agreements have genuinely smoothed the cycle, memory stocks should trade on annuity-like multiples — which means Cramer's bullish call effectively requires believing the volatility is gone while still pricing in the cyclical upside that stability would eliminate.
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- SanDisk, Seagate, Micron, and Western Digital are up 496%, 238%, 208%, and 171% YTD, driven by what SanDisk calls the "New Business Model" of long-term supply agreements that prevent the overcapacity building that historically tanked the stocks
- The four storage and memory firms' non-GAAP gross margins exploded to records: Micron hit 85% (from 30%), SanDisk 78% (from 22%), Western Digital 51% (from 40%), and Seagate 47% (from 35%)
- SanDisk's $6 billion buyback authorization exceeds the company's entire market cap from one year ago, with Seagate ($5B) and Western Digital ($4B) running similar programs while Micron reinvests in capacity instead
- Micron vaulted to a $1 trillion market cap from $136 billion in a year, with SanDisk ($244B), Seagate ($220B), and Western Digital ($195B) also ballooning — yet Cramer says these remain "the most hated and feared stocks in the entire market"
- The CNBC Investing Club bought Micron this week, with Cramer citing its growth profile and a valuation comparable to South Korean rivals Samsung and SK Hynix rather than to the other three storage names
- CoreWeave CEO Michael Intrator warned Cramer in a recent interview that the AI data center buildout will inevitably overbuild because nobody knows when to stop amid surging demand
- Anthropic's $11.5 billion in quarterly revenue, cited by Cramer as proof the AI infrastructure buildout is too financially entrenched to slow down
Why it matters: Storage and memory chipmakers collectively added over a trillion dollars in market value in roughly a year — Micron alone jumped from $136B to $1T — but Cramer's bullishness hinges on whether the industry's newfound supply discipline survives pressure from Samsung and capital equipment makers to eventually add capacity.
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