Jim Cramer has a reputation for caution when a stock has already run hard. This time, he is telling investors to ignore that instinct entirely, arguing that the usual rules of chip investing may no longer apply.
On a recent Mad Money segment, Cramer argued that some of the market’s biggest winners this year still have room to climb, even after gains that would normally make him nervous about chasing a rally this late.
Cramer says these four memory chip stocks are indispensable
Cramer named four memory and storage chip makers he calls “indispensable” right now: Micron, SanDisk, Seagate, and Western Digital. “While I acknowledge that I am not early, I do not think I am late,” he told viewers, according to CNBC. The numbers behind that call are striking. August 18, SanDisk has surged 653% in 2026, Seagate has climbed 261%, Micron has gained 254%, and Western Digital has risen 211%. Figures that would normally make a value-conscious investor wary of chasing further upside.
Cramer tied the rally directly to comments from Elon Musk. “Musk is right: Memory has become the bottleneck,” Cramer said, referencing Musk’s remarks on SpaceX’s second-quarter earnings call about memory supply constraining AI data center buildouts, Yahoo Finance reported.
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Cramer’s Charitable Trust, the portfolio behind CNBC’s Investing Club, recently opened a new position in Micron during a pullback tied to a selloff among South Korean semiconductor stocks. Cramer called Micron his top pick of the group, and he plans to visit the company’s Idaho research facility to interview CEO Sanjay Mehrotra.
Why Micron and other memory stocks keep climbing
The bull case rests on a genuine shift in the market structure. Memory chips have historically been a boom-and-bust business, since high upfront manufacturing costs push producers to keep making memory chips even after prices fall. Eventually flooding the market and crushing margins.
AI data centers appear to be breaking that old pattern, at least for now. Micron’s HBM and DRAM memory capacity is sold out through 2027. And AI data centers are projected to now consume roughly 70% of global memory chip production, according to TheStreet report, which also noted that Micron has committed $22 billion in advance cash deposits under customer agreement just to secure future supply –– underscoring how aggressively major customers are locking in future memory supply.
Billionaire investor George Soros has taken notice. His fund increased its Micron stake nearly eightfold in the second quarter, another sign that some major investors still see room for the memory trade to run on Cramer’s broader case for the stock, which noted Micron shares reclaimed the $1,000 mark on August 17 for the first time since July.
Not everyone agrees the old cycle is truly gone, though. Micron remains fundamentally a cyclical business, and its stock has already shown it can drop in a matter of days on nothing more than fears that the AI-driven memory boom could be peaking. Wall Street analysts remain split on how much further the rally can run, with New Street’s Pierre Ferragu recently issuing a dramatically higher price target on Micron, arguing investors are still underestimating how structurally different this memory cycle looks compared to prior ones.
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The AI bubble risk investors can’t ignore
The bigger question hanging over this entire trade is how it gets funded. AI companies are pouring hundreds of billions of dollars into data center construction, and a growing share of that spending comes from borrowed money rather than free cash flow.
Nvidia illustrates the scale involved. The company announced financing partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR on August 10, aiming to mobilize more than $500 billion in third-party capital for AI infrastructure, with Nvidia agreeing to backstop a portion of the cost itself, according to CNBC. The arrangement effectively treats Nvidia’s chips as a new kind of investable asset, similar to how Wall Street has historically financed toll roads or commercial real estate.
That kind of leverage has already made some investors nervous. TheStreet reported famed short seller Michael Burry published a note in July predicting the AI trade would “die a death by a thousand cuts.” Several AI-linked stocks have begun underperforming the broader S&P 500 as investors question whether infrastructure spending will pay off fast enough. Bank of America has pushed back on that pessimism directly, arguing the recent selloff in memory names is a buying opportunity rather than a warning sign.
Public opposition is adding another layer of risk to the broader AI infrastructure story. A Gallup poll conducted in March 2026 found that 71% of Americans opposed having an AI data center built near them. That’s more than the level of opposition ever recorded against local nuclear power plants, as reported by Gallup.
What should investors watch next?
That backlash has already reached Washington. Senator Bernie Sanders and Rep. Alexandria Ocasio-Cortez introduced federal legislation in March aiming to pause new data center construction, and warned that unchecked AI infrastructure growth threatens jobs and the environment. Multiple state legislatures have introduced similar measures of their own this year, even though most remain pending rather than enacted.
If politicians or communities succeed in slowing data center construction, or if the market simply stops rewarding new AI infrastructure spending, memory chip manufacturers could quickly find themselves back in familiar territory, overproducing chips into a market that no longer needs them at current prices.
For now, Cramer’s case rests on demand outrunning supply and manufacturers showing new capital discipline through share buybacks rather than reckless expansion. Investors weighing that bet should watch data center construction data, state and federal legislation, and quarterly capex commitments from hyperscalers just as closely as they watch memory chip earnings themselves, since any one of those threads could shift the calculus quickly.
Related: Jim Cramer sends strong verdict on where the market is headed
