Jim Cramer called out two storage giants sitting on massive year-to-date gains as the most dangerous stocks to own if one key spending trend reverses, and the math behind their profits makes the risk easy to underestimate.
Jim Cramer called out two storage giants sitting on massive year-to-date gains as the most dangerous stocks to own if one key spending trend reverses, and the math behind their profits makes the risk easy to underestimate.
SanDisk (NASDAQ:SNDK | SNDK Price Prediction) closed at $1,371.12 on October 19, up 5.53%, and Western Digital (NASDAQ:WDC) rose 6.09% to $352.21. On his Stop Trading segment that day, Jim Cramer said the rebound hides a bigger risk.
“SanDisk and Western Digital really didn’t lead us down. Those who are considered to be two commodity plays that have not added a lot of capacity to the data center,” Cramer said. “If there really is going to be fewer data centers, they are the worst stocks to own.”
Investors should listen to the warning because SanDisk is up 477.61% year to date and Western Digital is up 104.68%, and both gains assume hyperscalers keep expanding AI infrastructure.
Microsoft (NASDAQ:MSFT) spent $115.948 billion on capital expenditures in fiscal 2026 and expects about $175 billion in fiscal 2027. As long as that spending rises, storage suppliers can sell everything they make, along with the power, cooling, and networking vendors we profiled in a free report on seven AI infrastructure stocks that aren’t chipmakers. A slowdown would hit companies whose profits depend on storage prices first.
Why Every Storage Chart Looks the Same
The October 19 bounce came amid a steep slide. Over the past month, SanDisk fell 23.48%, and Western Digital fell 20.2%. Over the past week, they lost 7.81% and 8.98%.
“They’re doing well today. I do come back to the fact that every one of these charts looks the same,” Cramer said.
The market treats storage as one AI data center trade. Hard drive stocks also fell recently on fears tied to Toshiba. So holding both stocks gives you little diversification, because the same thing drives both: how fast hyperscalers build.
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