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Everyone's Buying NVIDIA - Here Are 2 Smarter AI Stocks for Q2 2026
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Key Takeaways
Micron benefits from surging AI memory demand, with strong HBM sales and pricing power driving growth.
MU projects $33.5B Q3 2026 revenues and 81% gross margin amid tight HBM supply and rising prices.
Broadcom's AI revenues jumped 106% YoY, with Q2 2026 outlook at $10.7B and strong margin expansion.
For years, NVIDIA Corporation (NVDA - Free Report) has been a Wall Street darling, with its shares scaling upward due to the relentless demand for its cutting-edge chips and graphics processing units (GPUs). However, despite a strong interest in its products, this year has been subdued for the Jensen Huang-led company. Geopolitical tensions and anxiety over a potential cut in spending on artificial intelligence (AI) infrastructure weighed on NVIDIA stock.
Therefore, savvy investors should look beyond NVIDIA and place bets on stocks that have the potential to gain momentum this quarter, and even longer. With hyperscalers announcing huge capital spending on AI this year, Micron Technology, Inc. (MU - Free Report) and Broadcom Inc. (AVGO - Free Report) stand to gain immensely. In the past year, Micron and Broadcom have soared 384.9% and 81.5%, respectively, outpacing NVIDIA’s 55.8% gain. Let us thus explore what makes them strong buys now –
Micron Set to Benefit From Surging AI-Driven Memory Demand
Micron’s AI-focused memory solutions continue to see rising demand. In particular, Micron’s high-bandwidth memory (HBM) chips are witnessing strong demand, thanks to their ability to handle heavy workloads while delivering improved power efficiency. As hyperscalers continue to expand their AI infrastructure, the demand for HBM chips remains robust.
The HBM chips are currently in a tight supply, creating a demand-supply imbalance, which is likely to push prices higher and benefit Micron over the long run. Micron, at the moment, has a strong pricing power for its DRAM and NAND products, which will drive revenue growth and improve profit margins.
For the fiscal third quarter of 2026, Micron projects revenues of $33.5 billion, more than $23.86 billion reported in the fiscal second quarter of 2026, according to investors.micron.com. Micron expects a high gross margin of 81% for the fiscal third quarter of 2026, reflecting strong financial momentum.
Consequently, Micron’s expected earnings growth rate for the current quarter and year is 904.7% and 603.9%, respectively. Brokers are also optimistic about Micron’s growth prospects. They forecast the average short-term price target for MU stock at $492.58, reflecting a 30.4% increase from the last closing price of $377.76. The highest target is $750, suggesting a potential upside of 98.5%.
Image Source: Zacks Investment Research
Broadcom Thrives on AI Chips, Boosting Growth
While the latest expansion of deals with Google and Anthropic has given Broadcom a lift, the company is thriving primarily due to its AI semiconductor solutions, including custom AI accelerators and AI networking. The company’s AI revenues for the fiscal first quarter of 2026 were $8.4 billion, up 106% year over year, and management expects AI revenues for the fiscal second quarter of 2026 to reach $10.7 billion, according to investors.broadcom.com.
With rising AI demand, Broadcom expects consolidated revenues to hit around $22 billion in the fiscal second-quarter 2026, up from $19.3 billion in the fiscal first quarter of 2026, a tell-tale sign that its position as a dominant infrastructure player enables continuous growth despite its massive size.
Broadcom is exhibiting strong pricing power and improved operational efficiency as it expects an exceptional adjusted EBITDA margin of around 68% of projected revenues in the fiscal second quarter of 2026. Its adjusted EBITDA of $13.1 billion in fiscal first-quarter 2026 was already 68% of revenues.
As a result, Broadcom’s expected earnings growth rate for the current quarter and year is 50% and 66.1%, respectively. Brokers, too, are bullish on Broadcom’s growth prospects. They estimate an average short-term price target for AVGO stock at $466.65, a 48.4% increase from the last closing price of $314.43. The highest target is $630, suggesting a potential upside of 100.4%.
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Everyone's Buying NVIDIA - Here Are 2 Smarter AI Stocks for Q2 2026
Key Takeaways
For years, NVIDIA Corporation (NVDA - Free Report) has been a Wall Street darling, with its shares scaling upward due to the relentless demand for its cutting-edge chips and graphics processing units (GPUs). However, despite a strong interest in its products, this year has been subdued for the Jensen Huang-led company. Geopolitical tensions and anxiety over a potential cut in spending on artificial intelligence (AI) infrastructure weighed on NVIDIA stock.
Therefore, savvy investors should look beyond NVIDIA and place bets on stocks that have the potential to gain momentum this quarter, and even longer. With hyperscalers announcing huge capital spending on AI this year, Micron Technology, Inc. (MU - Free Report) and Broadcom Inc. (AVGO - Free Report) stand to gain immensely. In the past year, Micron and Broadcom have soared 384.9% and 81.5%, respectively, outpacing NVIDIA’s 55.8% gain. Let us thus explore what makes them strong buys now –
Micron Set to Benefit From Surging AI-Driven Memory Demand
Micron’s AI-focused memory solutions continue to see rising demand. In particular, Micron’s high-bandwidth memory (HBM) chips are witnessing strong demand, thanks to their ability to handle heavy workloads while delivering improved power efficiency. As hyperscalers continue to expand their AI infrastructure, the demand for HBM chips remains robust.
The HBM chips are currently in a tight supply, creating a demand-supply imbalance, which is likely to push prices higher and benefit Micron over the long run. Micron, at the moment, has a strong pricing power for its DRAM and NAND products, which will drive revenue growth and improve profit margins.
For the fiscal third quarter of 2026, Micron projects revenues of $33.5 billion, more than $23.86 billion reported in the fiscal second quarter of 2026, according to investors.micron.com. Micron expects a high gross margin of 81% for the fiscal third quarter of 2026, reflecting strong financial momentum.
Consequently, Micron’s expected earnings growth rate for the current quarter and year is 904.7% and 603.9%, respectively. Brokers are also optimistic about Micron’s growth prospects. They forecast the average short-term price target for MU stock at $492.58, reflecting a 30.4% increase from the last closing price of $377.76. The highest target is $750, suggesting a potential upside of 98.5%.
Image Source: Zacks Investment Research
Broadcom Thrives on AI Chips, Boosting Growth
While the latest expansion of deals with Google and Anthropic has given Broadcom a lift, the company is thriving primarily due to its AI semiconductor solutions, including custom AI accelerators and AI networking. The company’s AI revenues for the fiscal first quarter of 2026 were $8.4 billion, up 106% year over year, and management expects AI revenues for the fiscal second quarter of 2026 to reach $10.7 billion, according to investors.broadcom.com.
With rising AI demand, Broadcom expects consolidated revenues to hit around $22 billion in the fiscal second-quarter 2026, up from $19.3 billion in the fiscal first quarter of 2026, a tell-tale sign that its position as a dominant infrastructure player enables continuous growth despite its massive size.
Broadcom is exhibiting strong pricing power and improved operational efficiency as it expects an exceptional adjusted EBITDA margin of around 68% of projected revenues in the fiscal second quarter of 2026. Its adjusted EBITDA of $13.1 billion in fiscal first-quarter 2026 was already 68% of revenues.
As a result, Broadcom’s expected earnings growth rate for the current quarter and year is 50% and 66.1%, respectively. Brokers, too, are bullish on Broadcom’s growth prospects. They estimate an average short-term price target for AVGO stock at $466.65, a 48.4% increase from the last closing price of $314.43. The highest target is $630, suggesting a potential upside of 100.4%.
Image Source: Zacks Investment Research
Both Micron and Broadcom currently have a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.