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Micron vs. Palantir: Only One AI Stock Is a Clear Buy Right Now
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Key Takeaways
Micron's HBM chip demand from AI infrastructure pushed fiscal Q1 2026 revenues up 56% YoY to $13.64B.
PLTR's AIP adoption drove Q4 2025 revenues up 70% YoY to $1.4B, with strong growth in U.S. commercial clients.
MU's lower valuation and diversified business contrast with Palantir's higher P/E and government reliance.
Both Micron Technology, Inc. (MU - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) have benefited from the artificial intelligence (AI) boom, with each gaining over 300% over the past two years. However, if you missed that rally and are looking to invest now, which one is the better buy? Let’s look at why they performed well and which stock offers a better buying opportunity.
Micron Rides AI Boom as HBM Chip Demand Fuels Revenue Surge
Micron’s high-bandwidth memory (HBM) chips are gaining popularity for their ability to handle large workloads while delivering better power efficiency. Micron expects the total addressable market for HBM to witness a CAGR of 40% from around $35 billion in 2025 to around $100 billion in 2028.
Strong demand for HBM chips helped Micron’s revenues for the first quarter of fiscal 2026 jump 56% year over year to $13.64 billion, according to investors.micron.com. Revenue growth was largely driven by the cloud memory business segment, which reported sales of $5.28 billion, up a staggering 99.5% year over year. The increase in revenues helped Micron report non-GAAP net income of $5.48 billion, which exceeded analysts’ expectations.
Revenues are expected to grow further as demand for HBM chips remains strong despite supply constraints. As hyperscalers and data center operators continue to ramp up AI infrastructure, demand for these chips is expected to remain resilient. Micron’s CEO, Sanjay Mehrotra, noted that the demand-supply imbalance in HBM chips could drive higher prices, which could benefit Micron in the future.
In this context, Micron expects stronger financial performance, projecting revenues of $18.3 billion to $19.1 billion for the second quarter of fiscal 2026, along with an increase in net income.
Palantir’s Scalable Platforms and AI Capabilities Fuel Momentum
Palantir has witnessed strong growth due to the growing adoption of its Artificial Intelligence Platform (AIP) by several U.S. commercial clients and the government. This is because AIP can help organizations easily deploy AI and large language models into highly complex data systems.
Strong demand for AIP helped Palantir post revenues of $1.4 billion in the fourth quarter of 2025, up 70% year over year and 19% sequentially, according to investors.palantir.com. U.S. commercial client segment revenues jumped 137% year over year and 28% quarter over quarter to $507 million, while revenues from the government segment advanced 66% year over year and 17% sequentially to $570 million.
Management further expects revenues to increase from $4.475 billion in 2025 to $7.182-$7.198 billion in 2026. Similarly, GAAP net income is expected to improve in 2026, following a $609 million GAAP net income reported in the fourth quarter of 2025, representing a margin of 43%.
Palantir posted a robust adjusted free cash flow of $791 million in the fourth quarter of 2025 and expects further cash flow growth as its Gotham and Foundry platforms face minimal competition. The increased cash flow will give Palantir greater flexibility for strategic investments and expansion. Boasting a Rule of 40 score of 127%, far exceeding the 40% threshold, Palantir showcases a highly scalable business model that reinforces its strong growth prospects.
Micron or Palantir: Which AI Stock Should Investors Pick Today?
The growing demand for HBM chips, fueled by AI infrastructure, is driving strong revenue and earnings growth for Micron. Similarly, Palantir’s AIP adoption is driving strong financial results and highlights a highly scalable business model.
However, Palantir remains heavily reliant on government spending, making it vulnerable to policy changes or delays that could hamper revenue growth. For instance, Anthropic’s AI models were blacklisted by the Trump administration, forcing Palantir to replace the AI in its defense platform, causing potential delays and an increase in cost. On the other hand, Micron operates a diversified business spanning memory, storage and cutting-edge semiconductor solutions.
From a valuation standpoint, Palantir seems significantly overvalued compared to Micron, with a forward price-to-earnings (P/E) ratio of 115.65 compared to Micron’s 11.93, indicating its stock could drop sharply if the broader market corrects.
Image Source: Zacks Investment Research
Therefore, Micron appears to be a more attractive investment than Palantir. Micron has a Zacks Rank #1 (Strong Buy), while Palantir has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Micron vs. Palantir: Only One AI Stock Is a Clear Buy Right Now
Key Takeaways
Both Micron Technology, Inc. (MU - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) have benefited from the artificial intelligence (AI) boom, with each gaining over 300% over the past two years. However, if you missed that rally and are looking to invest now, which one is the better buy? Let’s look at why they performed well and which stock offers a better buying opportunity.
Micron Rides AI Boom as HBM Chip Demand Fuels Revenue Surge
Micron’s high-bandwidth memory (HBM) chips are gaining popularity for their ability to handle large workloads while delivering better power efficiency. Micron expects the total addressable market for HBM to witness a CAGR of 40% from around $35 billion in 2025 to around $100 billion in 2028.
Strong demand for HBM chips helped Micron’s revenues for the first quarter of fiscal 2026 jump 56% year over year to $13.64 billion, according to investors.micron.com. Revenue growth was largely driven by the cloud memory business segment, which reported sales of $5.28 billion, up a staggering 99.5% year over year. The increase in revenues helped Micron report non-GAAP net income of $5.48 billion, which exceeded analysts’ expectations.
Revenues are expected to grow further as demand for HBM chips remains strong despite supply constraints. As hyperscalers and data center operators continue to ramp up AI infrastructure, demand for these chips is expected to remain resilient. Micron’s CEO, Sanjay Mehrotra, noted that the demand-supply imbalance in HBM chips could drive higher prices, which could benefit Micron in the future.
In this context, Micron expects stronger financial performance, projecting revenues of $18.3 billion to $19.1 billion for the second quarter of fiscal 2026, along with an increase in net income.
Palantir’s Scalable Platforms and AI Capabilities Fuel Momentum
Palantir has witnessed strong growth due to the growing adoption of its Artificial Intelligence Platform (AIP) by several U.S. commercial clients and the government. This is because AIP can help organizations easily deploy AI and large language models into highly complex data systems.
Strong demand for AIP helped Palantir post revenues of $1.4 billion in the fourth quarter of 2025, up 70% year over year and 19% sequentially, according to investors.palantir.com. U.S. commercial client segment revenues jumped 137% year over year and 28% quarter over quarter to $507 million, while revenues from the government segment advanced 66% year over year and 17% sequentially to $570 million.
Management further expects revenues to increase from $4.475 billion in 2025 to $7.182-$7.198 billion in 2026. Similarly, GAAP net income is expected to improve in 2026, following a $609 million GAAP net income reported in the fourth quarter of 2025, representing a margin of 43%.
Palantir posted a robust adjusted free cash flow of $791 million in the fourth quarter of 2025 and expects further cash flow growth as its Gotham and Foundry platforms face minimal competition. The increased cash flow will give Palantir greater flexibility for strategic investments and expansion. Boasting a Rule of 40 score of 127%, far exceeding the 40% threshold, Palantir showcases a highly scalable business model that reinforces its strong growth prospects.
Micron or Palantir: Which AI Stock Should Investors Pick Today?
The growing demand for HBM chips, fueled by AI infrastructure, is driving strong revenue and earnings growth for Micron. Similarly, Palantir’s AIP adoption is driving strong financial results and highlights a highly scalable business model.
However, Palantir remains heavily reliant on government spending, making it vulnerable to policy changes or delays that could hamper revenue growth. For instance, Anthropic’s AI models were blacklisted by the Trump administration, forcing Palantir to replace the AI in its defense platform, causing potential delays and an increase in cost. On the other hand, Micron operates a diversified business spanning memory, storage and cutting-edge semiconductor solutions.
From a valuation standpoint, Palantir seems significantly overvalued compared to Micron, with a forward price-to-earnings (P/E) ratio of 115.65 compared to Micron’s 11.93, indicating its stock could drop sharply if the broader market corrects.
Image Source: Zacks Investment Research
Therefore, Micron appears to be a more attractive investment than Palantir. Micron has a Zacks Rank #1 (Strong Buy), while Palantir has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.