What Makes SNDK 'Easy' AI Memory Investment as Demand Remains Parabolic

SPEAKER_1 (0:00)

It's time for our watchlist panel. We're discussing the outlook for those memory stocks. Hot, not, let's see what our guests think. Lucas Downey, co-founder moneyflows.com, Chris Ward, founder and senior wealth advisor, Entry Point Wealth Management. It's great to see you both. So there was a time these were soaring and then pulled back a little out of favor and then back in fashion. Let's talk about some of these names. Lucas Downey, some of your thoughts.

Lucas Downey (0:26)

Yeah, the memory trade continues to work. If you recall, we were on your show about a year ago, saying that a lot of money was going into all of these memory names, including Micron and SanDisk.

Our view has not changed. Money flows continue to be sticky in these names. If you look at the estimated earnings picture for next year and years out, they continue to go higher. Even before this video, I had to revise some of our charts because the earnings continue to be raised by analysts. So we are still constructive on the memory space.

SPEAKER_1 (1:06)

You said the data center buildout isn't slowing, earnings aren't slowing, and as the AI trade gets hammered, it's time to buy the dip. Chris Ward, what do you say here? What's your general outlook for the memory stocks today?

Chris Ward (1:18)

Yeah, I think the first thing is investors need to fasten their seatbelt. But they need to enjoy the ride.

You know, it's a volatile part of the market, but we've seen just an incredible demand for AI.

And if you're going to use AI and you want, and you see this adoption continuing, it's not just going to be growth in chip stocks, semiconductors. It's going to branch out, it's going to broaden out to really what's going to power some of these bigger themes, which is memory, right? And having strong, capable memory to power these large language models is a must. You've spent the last, I don't know, 60, 90 minutes on Schwab Network highlighting just some of the innovation Facebook is bringing to market with Muse and the adoption there and the potential. You know, that's a, I haven't even really investigated that, but I know in my daily life, I'm doing more and more with Claude and Chad GPT, and it's really taken off to service professionals and go mainstream. So these names that are growing at like large multiples, year over year revenues, profits, you would expect it to continue.

SPEAKER_1 (2:26)

Well, what we saw was definitely this sort of Hills and Valleys story of what we saw with some of these memory names. For example, over the summer, SanDisk was at 2354 And then at a lower point, a little later, maybe at the end of July into August, this thing was, you know, barely holding a thousand, right? From 2300 So it shows you this volatility.

Lucas, you noted that for the big picture here in some of these names, the evidence is there. You talked about maybe some cheap storage names or memory names. Let's talk about that. Which names stand out to you, whether it's valuation or the potential going forward? Some of your thoughts.

Lucas Downey (3:06)

Yeah, definitely. You are right. There was a lot of volatility that happened this summer, especially as news came about of the situational awareness event. We were flagging that it looked like a forced liquidation was occurring, and then we saw right whenever the news hit, these stocks just bounced ferociously. So there's been a catch-up trade since then, and one name that really stuck out is SanDisk.

This is an SSD, fast storage for your laptop servers. They do all those micro SD cards that we see everywhere. But what was really interesting about this name is, it has a forward PE of 6.9 times. You're talking about a company where in fiscal year 2027, earnings have been revised higher to $212 and change. You go out another year, it's $262. And if you look back historically, this is a company that was trading at $30 in April of 2025 So you're talking about many, many times in earnings are expected for next year. So we just see this as a great valuation. And given the backlogs are continued to extend even out to 2030, we think that this is an easy play for the memory and storage.

SPEAKER_1 (4:32)

What's interesting too is you have some of these tech leaders in Washington with the President and President Trump and President Xi and NVIDIA's Jensen Wong actually sort of thought out of the box a little bit and shook the group a bit when he's talked about maybe even suggesting a drastic alternative. If OpenAI and Anthropic can't control their agents, maybe they should shut the labs down. I don't know if he was being very facetious, but that it needs to be done safely and that sort of shakes the room a bit. But the build out seems to be going. It takes time from development to get the build out going. In the meantime, you said Chris, maybe folks instead of looking at one name at a time that might have volatility, maybe using ETFs, right? I mean like DRAM or something.