The Nasdaq Is Approaching All-Time Highs. Is It Too Late to Buy These Artificial Intelligence (AI) Growth Stocks?

The article is bullish on two AI-linked memory/storage stocks, Sandisk and Micron, citing continued demand from the AI memory supercycle and attractive valuations. Sandisk is up 304% year to date and 3,142% over 12 months, yet still has a forward P/E of 17; Micron is up 70% YTD and 593% over 12 months, with a forward P/E of 9 and HBM supply sold out into 2026. The broader backdrop is a Nasdaq rebound of nearly 14% in April and a new all-time high, reinforcing risk-on sentiment in AI and growth names.

Analysis

The important signal is not that AI demand is strong, but that memory pricing is becoming a bottlenecked profit pool. In a supercycle, the key second-order effect is that hyperscaler capex gets partially reallocated from compute into memory, which temporarily lifts margin quality for the few scaled suppliers while pressure builds on downstream buyers to optimize architectures and delay less efficient builds. That tends to favor the name with the tightest supply discipline and the most leverage to HBM rather than broad semis exposure.

The market is still underestimating how asymmetric the earnings leverage is in memory when inventories are clean and sold-out capacity extends into next year. If HBM allocation is effectively pre-sold, the next leg is less about volume surprise and more about pricing power persisting longer than consensus models assume, which can keep forward multiples deceptively low even after large price appreciation. The risk is that the market extrapolates peak margins too far out; memory cycles usually end when incremental supply finally clears, not when demand disappears.

From a competitive standpoint, the bigger winner may be the supplier mix within AI infrastructure rather than the most obvious AI compute beneficiaries. A sustained memory squeeze can slow customers’ willingness to spend on edge devices and lower-end storage, while reinforcing concentration among the few top-tier DRAM/HBM vendors. That also creates a subtle negative for any firms needing cheaper memory to defend device ASPs or gross margins.

The contrarian read is that the rally could still be under-owned by fundamental managers because it looks like a late-cycle momentum trade, when in fact the earnings revisions are still catching up. The best entry is on pullbacks caused by macro risk-off rather than on breakout chasing, because the tape is already reflecting enthusiasm while estimates likely lag another quarter or two.

Key Decisions for Investors

• Maintain/ initiate long MU on 3-6 month horizon; best risk/reward is via call spreads or stock on weakness, since sold-out HBM capacity can support upward earnings revisions even if the multiple compresses.
• Trade SNDK vs. WDC long/short over 1-3 months; SNDK has cleaner AI-driven scarcity leverage, while WDC is more likely to lag if investors rotate to the purest memory beneficiary.
• Add tactically to NVDA only on memory-related pullbacks rather than chasing highs; if memory pricing stays tight, NVDA remains supported, but upside is more capped than the suppliers’ because the market already assumes dominant share.
• Avoid shorting MU/SNDK as a mean-reversion trade until there is evidence of inventory rebuild or capex normalization; the better short catalyst is likely 2-3 quarters out, not immediately.
• For higher-conviction traders, consider a pair long MU / short a broad semiconductor basket over 2-4 months to isolate the memory-supercycle tailwind from general AI semi beta.