Jim Cramer names 4 'indispensable' memory stocks he says investors 'can't afford' to skip as AI demand soars

Jim Cramer names 4 'indispensable' memory stocks he says investors 'can't afford' to skip as AI demand soars

Kit Pulliam

Thu, August 20, 2026 at 6:25 PM GMT+3 4 min read

AI is making memory stocks soar. Jim Cramer of Mad Money says you should buy high.

"I say that you have to free yourself of these constraints and understand that sometimes, it really is different," said Cramer on a recent Mad Money segment. "Sometimes, the opportunity is too great, and you can't afford not to take it."

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Cramer says that four memory chip makers are "indispensable" right now: Seagate, Western Digital, Micron and Sandisk.

"Musk is right: Memory has become the bottleneck," says Cramer, likely referring to Musk's recent statements on SpaceX's Q2 earnings call. "And these four companies — well, you know what? It's pretty good if it stays that way."

But will it stay that way? And is it worth buying high if there's a chance these companies' stocks will climb even higher as new data centers are being built?

Here's what to know.

Cramer says the memory chip market is usually cyclical — but data centers are changing that, for now

Cramer is first to admit that he's not early to memory chip stock. That matters, because memory stocks are known to cyclically boom and bust.

Memory chips have huge upfront costs; because of that, once a company starts printing memory chips, it's generally worth it to keep going until memory prices are very low. This means that memory tends to ping between too much supply and too much demand, and memory manufacturers' stock prices reflect what part of the cycle memory is currently in.

The question, then, is whether AI has broken that cycle.

Data centers, which require computer memory to work, are being built at unprecedented rates. If combined data center and consumer demand for chips eclipse memory companies' ability to create memory chips, then memory stock could continue to climb past when it would normally crater.

Still, this can't last forever. Eventually companies will slow down on data center construction, and memory chip supply will once again eclipse demand. Memory companies' stock success depends on how long data centers can give them a boost.

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How likely are we to see an AI bubble pop soon?

Right now, AI companies are sinking enormous amounts of money into data centers. AI companies' capex, or capital expenditures, are huge — in the hundreds of billions of dollars, with much of that being spent on producing infrastructure like data centers.

A significant portion of these expenditures come from borrowed funds. NVIDIA, for example, just borrowed $500 billion for AI infrastructure creation. The market is beginning to grow wary, and some AI companies are starting to underperform the S&P 500.

Data centers are also growing increasingly unpopular among the communities they're built in. They tend to drive up electric costs for people living near them and can also consume water that local communities need to function. According to a Gallup poll, around 70% of Americans would not want a data center to be built in their local area.

As a result, politicians are beginning to push back against data centers. Over 25 states are either considering or have already enacted legislation that would regulate or disincentivize data center creation. Sen. Bernie Sanders even introduced a bill to put an indefinite moratorium on new data centers being built. If politicians and local communities succeed in slowing down data center creation — or if the market stops rewarding new AI infrastructure — then memory chip manufacturers could easily overproduce chips, flooding the market and causing stock to go back down.

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This article originally appeared on Moneywise.com under the title: Jim Cramer names 4 'indispensable' memory stocks he says investors 'can't afford' to skip as AI demand soars

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