Wall Street Skeptical: Can AI Boom Last? SanDisk, Micron Valuations Hit Tech Stock Lows at 6x P/E, Sparking Debate

Artificial intelligence (AI) is driving explosive demand for high-bandwidth memory (HBM) and enterprise storage, leading to repeated upward revisions in memory manufacturers' profit forecasts. However, market valuations have instead declined to the lowest levels among large-cap technology stocks. SanDisk (SNDK-US) and Micron Technology (MU-US) currently trade at forward price-to-earnings (P/E) ratios of approximately 6.0x and 6.3x, respectively, sparking market debate: Are they fundamentally undervalued, or does this reflect investor skepticism that the memory cycle will eventually reverse?

According to market data, SanDisk (SNDK-US) trades at a 6.0x forward P/E, making it the lowest-valued large-cap tech stock in the U.S.; Micron Technology (MU-US) follows closely at 6.3x. Both companies have seen their share prices surge 444.4% and 216.1% year-to-date, yet Wall Street continues to apply valuation metrics typically reserved for cyclical bottom enterprises.

In contrast, GoDaddy (GDDY-US) has a forward P/E of 8.6x despite a 28.2% decline in its stock price this year; Super Micro Computer (SMCI-US) trades at 8.9x, still 75.4% below its historical peak; Adobe (ADBE-US) at 9.9x, down 26.7% year-to-date; and Gartner (IT-US) at 11.7x, still 68.8% below its all-time high.

Company | Forward P/E | 2026 Share Return | % Below Historical High ---|---|---|--- SanDisk (SNDK-US) | 6.0x | +444.4% | -45.7% Micron Technology (MU-US) | 6.3x | +216.1% | -28.6% GoDaddy (GDDY-US) | 8.6x | -28.2% | -58.7% Super Micro Computer (SMCI-US) | 8.9x | +3.4% | -75.4% Cognizant Technology Solutions (CTSH-US) | 9.3x | -32.4% | -36.3% Gen Digital (GEN-US) | 9.4x | +0.5% | -13.5% Adobe (ADBE-US) | 9.9x | -26.7% | -63.2% HP (HPQ-US) | 10.3x | +26.7% | -23.3% Gartner (IT-US) | 11.7x | -27.9% | -68.8%

Source: Koyfin

Notably, the low valuations are not due to downward revisions in earnings estimates. On the contrary, they come amid continuous upward revisions to future profit forecasts.

Current market expectations project SanDisk (SNDK-US)’s earnings per share (EPS) over the next 12 months to reach $214.32, up 27.6% from around $168 three months ago. Yet, its stock price remains about 46% below its historical peak.

Micron Technology (MU-US) shows a similar pattern. Analysts now estimate its next 12-month EPS at $144.21, up 26.7% from approximately $114 three months prior, but its share price still lags about 29% below its all-time high.

Market observers note this indicates that share price appreciation has lagged far behind the pace of earnings forecast upgrades, causing the P/E ratio to compress rapidly.

However, some analysts argue that memory has always been one of the most cyclical sectors in the semiconductor industry. Historical patterns show that memory stocks often hit their lowest P/E ratios precisely when earnings approach their peak. As supply gradually increases and prices fall, corporate profits could decline sharply—meaning today’s seemingly cheap 6x P/E could quickly turn into an expensive multiple.

Yet, whether AI can alter this industrial cycle has become the central debate in markets.

In its latest earnings report, SanDisk (SNDK-US) stated it is advancing a new business model based on multi-year supply contracts with fixed and floor pricing. The company expects these contracts to cover over half of its shipped bits by fiscal 2027 and rise to about two-thirds by fiscal 2028. These long-term agreements collectively provide $16.5 billion in financial assurance, helping mitigate risks from memory price volatility.

Meanwhile, Micron Technology (MU-US) recently announced it has signed 16 long-term supply agreements with customers, extending contract terms through 2030. Its latest guidance forecasts quarterly revenue of approximately $50 billion, up from $41.46 billion in the prior quarter, indicating continued strong AI demand.

Recently, major HBM suppliers including Micron, SK Hynix, and Samsung Electronics have indicated that most of their high-bandwidth memory capacity for 2026 and 2027 has already been pre-sold. With AI servers continuing to drive demand for DRAM and NAND Flash, and major cloud service providers expanding AI data center investments, the market is beginning to reassess whether the memory industry has entered a new cycle distinct from its past.

Analysts point out that if long-term AI demand can sustain memory prices and corporate profits at elevated levels, today’s ~6x forward P/E would appear remarkably cheap. Conversely, if AI demand ultimately reverts to traditional semiconductor cyclicality, the current low valuation may simply reflect market expectations that profits are nearing their peak.

In other words, SanDisk (SNDK-US) and Micron Technology (MU-US) have become the most representative valuation barometers in the AI investment frenzy. What the market truly cares about is not only whether AI demand will continue to grow, but whether AI is powerful enough to permanently transform the memory industry’s historically hyper-cyclical business model.