What Sandisk's play on surging memory prices means for our tech stocks

An important development from the financial markets: Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. It's a new month, but it's more of the same for the S & P 500. The broad index is on its way to another record close Friday after wrapping up its best month since November 2020 on Thursday.

Oil prices fell on Friday after Iran reportedly responded to Washington's latest changes to a draft agreement to end the Iran war. President Donald Trump said he was "not satisfied" with it, which helps explain why crude moved off its session lows. oil benchmark WTI was down more than 3%, to about $101.

Economic Details

The divergence in performance across the Club's portfolio in April reinforces our belief that there are essentially two markets right now — the data center stocks and everything else. On the "winning" side were the AI and data center-related names that have powered much of the market rally. Arm surged nearly 40% last month, while Broadcom and Alphabet each jumped more than 30%.

The resurgent Amazon wasn't far behind, and electrical equipment supplier Eaton and glassmaker Corning also posted standout gains, underscoring the strength tied to anything benefiting from the AI buildout. On the other side, Cardinal Health and Johnson & Johnson were among our laggards, reflecting the market's disinterest in most healthcare names. Nike was our worst-performing stock in April, though most of those losses came early in the month in response to its disappointing earnings report on the night of March 31.

After closing at $42. 62 on April 10, the stock drifted a little higher and traded above $44 on Friday. Sky-high memory prices were a big theme during this jam-packed week of earnings.

Analyst Views

All of the five megacap tech companies that reported are contending with the AI-driven price surge. Plus, some of the memory companies themselves reported (Western Digital and Sandisk). On Wednesday evening, Meta directly cited the increase in memory pricing as the primary cause for its raised capital expenditures guidance .

Microsoft also said rising component costs were responsible for about $25 billion worth of their calendar 2026 capex guide of $190 billion . Then on Thursday evening , Apple told investors to expect the memory price headwind to be with us for a while. As investors in companies hurt by memory prices, we must pay attention to what we're hearing from the likes of Sandisk and others.

They're the ones that are actually responsible for the supply (or, in this case, the lack thereof). Looking at SanDisk's earnings call from Thursday night, its customers are reacting to the surge. Sandisk said it's seeing increased interest in multi-year supply agreements, with five signed to date valued at over $11 billion.

Financial markets are tracking the development closely as investors assess the likely impact.