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One AI Stock Outpacing NVIDIA & Palantir - Why It's a Better Buy
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Key Takeaways
Micron's AI memory demand and limited HBM supply are driving revenue growth and pricing power.
MU forecasts rising revenue and strong margins as hyperscalers boost AI infrastructure spending.
Lower valuation versus rivals and diversified chip exposure make MU a compelling AI investment.
Both NVIDIA Corporation (NVDA - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) have soared on the artificial intelligence (AI) boom, gaining 79% and 25.6%, respectively, over the past year. Both stocks reported strong revenue growth and profitability in their latest quarterly results, reinforcing their position as the most in-demand stocks on Wall Street.
But lately, Micron Technology, Inc. (MU - Free Report) has emerged as a standout in the AI trade, challenging NVIDIA and Palantir’s leadership among Wall Street’s AI stocks. Its shares skyrocketed 504.3% over the past year. Let us thus see how NVIDIA and Palantir have performed, how Micron has fared, and why the latter could be the more compelling buy right now.
Strong AI Growth and Profitability Drive Momentum at NVDA and PLTR
As demand for AI infrastructure surged, NVIDIA reported record data center revenues of $62.3 billion in the fourth quarter of fiscal 2026, up 75% year over year, and driving total revenues to $68.1 billion, according to nvidianews.nvidia.com.
NVIDIA expects first-quarter fiscal 2027 revenues of $78 billion and maintains strong profitability, with a gross margin of 75%, highlighting robust AI demand and premium pricing power.
Similarly, Palantir’s total revenues for the fourth quarter of 2025 were $1.4 billion, up 70% year over year, driven by strong demand for its Artificial Intelligence Platform (AIP), according to investors.palantir.com.
For the quarter, Palantir’s U.S. commercial revenues were up 137% year over year to $507 million, and government revenues jumped 66% year over year to $570 million. The company reported $609 million in GAAP net income, while forecasting 2026 revenues to climb to $7.182-$7.198 billion, supported by strong contract growth and rising deal value.
Strong AI Memory Demand Powers Micron’s Growth and Margins
Incessant demand for Micron’s AI-focused memory solutions helped the company post $23.86 billion in revenues for the fiscal second quarter of 2026, according to investors.micron.com. The company further expects revenues to increase to $33.5 billion in the fiscal third quarter of 2026 as demand for Micron’s high-bandwidth memory (HBM) chips improved, mostly due to their capability to handle huge workloads more efficiently while consuming less power.
As hyperscalers continue to scale up their AI infrastructure, demand for HBM chips remains strong. Additionally, the current limited supply of HBM chips has created a demand-supply imbalance that would help Micron push prices higher and benefit in the long run.
Micron also benefits from strong pricing power in its DRAM and NAND products, which support revenue growth and margin expansion. The company anticipates a strong gross margin of 81% for the fiscal third quarter of 2026, indicating continued strong financial momentum.
What Makes Micron the Better Investment Now
No doubt, NVIDIA, Palantir and Micron are all witnessing strong AI-fueled growth, with NVIDIA dominating in data centers, Palantir in AI platforms, and Micron in memory solutions. However, Palantir’s dependency on government spending makes it vulnerable to any sudden policy changes and hampers revenue growth. On the other hand, Micron’s focus on memory, storage, and state-of-the-art semiconductor solutions makes its business more diversified, helping to reduce concentration risk.
In comparison to NVIDIA, Micron’s lower valuation and significant upside from tightening supply and rising AI-driven demand for its memory chips make it a more attractive investment. NVIDIA seems overvalued compared to Micron, with a forward price-to-earnings (P/E) ratio of 24.77 compared to Micron’s 8.25, suggesting greater downside risk if the broader market corrects.
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One AI Stock Outpacing NVIDIA & Palantir - Why It's a Better Buy
Key Takeaways
Both NVIDIA Corporation (NVDA - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) have soared on the artificial intelligence (AI) boom, gaining 79% and 25.6%, respectively, over the past year. Both stocks reported strong revenue growth and profitability in their latest quarterly results, reinforcing their position as the most in-demand stocks on Wall Street.
But lately, Micron Technology, Inc. (MU - Free Report) has emerged as a standout in the AI trade, challenging NVIDIA and Palantir’s leadership among Wall Street’s AI stocks. Its shares skyrocketed 504.3% over the past year. Let us thus see how NVIDIA and Palantir have performed, how Micron has fared, and why the latter could be the more compelling buy right now.
Strong AI Growth and Profitability Drive Momentum at NVDA and PLTR
As demand for AI infrastructure surged, NVIDIA reported record data center revenues of $62.3 billion in the fourth quarter of fiscal 2026, up 75% year over year, and driving total revenues to $68.1 billion, according to nvidianews.nvidia.com.
NVIDIA expects first-quarter fiscal 2027 revenues of $78 billion and maintains strong profitability, with a gross margin of 75%, highlighting robust AI demand and premium pricing power.
Similarly, Palantir’s total revenues for the fourth quarter of 2025 were $1.4 billion, up 70% year over year, driven by strong demand for its Artificial Intelligence Platform (AIP), according to investors.palantir.com.
For the quarter, Palantir’s U.S. commercial revenues were up 137% year over year to $507 million, and government revenues jumped 66% year over year to $570 million. The company reported $609 million in GAAP net income, while forecasting 2026 revenues to climb to $7.182-$7.198 billion, supported by strong contract growth and rising deal value.
Strong AI Memory Demand Powers Micron’s Growth and Margins
Incessant demand for Micron’s AI-focused memory solutions helped the company post $23.86 billion in revenues for the fiscal second quarter of 2026, according to investors.micron.com. The company further expects revenues to increase to $33.5 billion in the fiscal third quarter of 2026 as demand for Micron’s high-bandwidth memory (HBM) chips improved, mostly due to their capability to handle huge workloads more efficiently while consuming less power.
As hyperscalers continue to scale up their AI infrastructure, demand for HBM chips remains strong. Additionally, the current limited supply of HBM chips has created a demand-supply imbalance that would help Micron push prices higher and benefit in the long run.
Micron also benefits from strong pricing power in its DRAM and NAND products, which support revenue growth and margin expansion. The company anticipates a strong gross margin of 81% for the fiscal third quarter of 2026, indicating continued strong financial momentum.
What Makes Micron the Better Investment Now
No doubt, NVIDIA, Palantir and Micron are all witnessing strong AI-fueled growth, with NVIDIA dominating in data centers, Palantir in AI platforms, and Micron in memory solutions. However, Palantir’s dependency on government spending makes it vulnerable to any sudden policy changes and hampers revenue growth. On the other hand, Micron’s focus on memory, storage, and state-of-the-art semiconductor solutions makes its business more diversified, helping to reduce concentration risk.
In comparison to NVIDIA, Micron’s lower valuation and significant upside from tightening supply and rising AI-driven demand for its memory chips make it a more attractive investment. NVIDIA seems overvalued compared to Micron, with a forward price-to-earnings (P/E) ratio of 24.77 compared to Micron’s 8.25, suggesting greater downside risk if the broader market corrects.
Image Source: Zacks Investment Research
Micron currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.