Two AI Market Leaders Are on Sale

Specifically, storage and memory stocks are in a bear market. And that means two AI market leaders are on sale.

Companies With Great Fundamentals Are Way Down

Equity prices reflect supply and demand in the short term. But over time, prices reflect earnings power.

Sometimes short-term action creates imbalances. It’s happening now with AI memory stocks. Some companies with great fundamentals are way down, including SK Hynix (SKHY), Western Digital (WDC), SanDisk (SNDK), and Micron (MU):

Is it time to sell and head to cash? Or are great companies on sale and it feels uncomfortable?

For me, it’s door number two. Some great stocks are oversold.

Key AI Suppliers

The memory and storage supply bottleneck took hold last year and it’ll be with us for a while. Data center build-outs aren’t stopping, keeping chip demand high.

That’s great for Micron. The $1 trillion memory giant is a key supplier for hyperscalers. The company has noted how HBM, DRAM, and NAND shortages will persist well past 2026.

The latest selloff has sent shares down 25% from highs, driving the forward price-earnings ratio to just 6.3 times:

This pullback is attractive because per-share earnings are expected to grow to over $166 by 2028. That helps attract institutional investors, which has been no issue for Micron.

It’s been under big accumulation, drawing many outlier inflows:

Another oversold AI leader is SanDisk, the $250 billion flash memory giant.

Shares have fallen 31%, perhaps due to emotional short-term action:

Some think this could be a hard fall from the peak. Others view it as a dip worth buying.

I’m in the latter camp, considering EPS is expected to hit nearly $207 in 2027 and over $241 in 2028, after being $66.72 in 2026. When earnings climb, prices tend to follow.

Institutions have not soured on the company. In fact, the recent consolidation looks like prior cooldowns:

Don’t get me wrong, these selloffs aren’t fun. But if you step back and take a longer view, they’re simply part of the climb higher for outlier stocks.

Spot the Biggest Trends

Believe it or not, pullbacks are common.

But if you expect them as part of market supply and demand, there are opportunities to be had.

If you are a Registered Investment Advisor (RIA) or a serious investor, take your investing to the next level and follow our free weekly MoneyFlows insights.

Disclosure: at the time of publication, the author holds no positions in SKHY, WDC, SNDK, or MU.