Jim Cramer Wondered Whether Sandisk Is No Longer Cyclical & Expected Western Digital To Raise Guidance More

Jim Cramer questioned whether Sandisk Corporation and Western Digital Corporation are no longer cyclical and if Western Digital is expected to raise guidance more. Both companies have seen significant stock price increases year-to-date, with Sandisk up 455% and Western Digital up 159%. The stocks experienced declines on August 6th, the day Cramer made the remarks.

Cramer also discussed Ben Reitzes' comments about Sandisk and Melius Research's stance on the companies being momentum stocks. Western Digital reported strong Q1 earnings, beating estimates, but failed to impress investors with guidance. Sandisk's earnings also surpassed estimates, with both companies guiding Q1 revenue and profit expectations higher than analysts.

Investors are debating whether the recent growth in both firms is cyclical or structural. Western Digital's low-cost HDD storage and Sandisk's long-term business agreements and hyperscaler spending are seen as potential strengths. However, bears argue that production ramp-ups could lead to cyclical market challenges and competition from Seagate.

Hedge fund sentiment shows a slightly stronger bearish stance for Western Digital, with 8% of the float short compared to 7.4% for Sandisk. While Insider Monkey sees potential risks, they believe certain AI stocks have higher upside potential, such as one with 100x upside.