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Micron vs. NVIDIA: One AI Stock Is a Clear Buy Right Now
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Key Takeaways
Micron expects fiscal Q3 2026 revenues of $33.5B and gross margin near 81%.
NVDA posted record fiscal Q1 2027 revenues of $81.6B and projects $91B for Q2.
MU trades at 16.65 forward earnings versus NVDA's higher multiple of 22.97.
Riding the artificial intelligence (AI) boom, Sanjay Mehrotra-led Micron Technology (MU - Free Report) outpaced Jensen Huang-led NVIDIA Corporation (NVDA - Free Report) over the past year, rising 761.5% compared to NVIDIA’s 44.3%. Let us thus see how both companies performed and whether Micron holds an investment edge over NVIDIA –
Image Source: Zacks Investment Research
The Bullish Case for MU Stock
Micron reported revenues of $23.86 billion in the fiscal second quarter of 2026 and expects revenues to improve further to $33.5 billion in the fiscal third quarter, according to investors.micron.com. As hyperscalers increase their spending on AI infrastructure, Micron’s advanced high-bandwidth memory (“HBM”) chips are witnessing high demand, supporting revenue growth.
The present supply-demand imbalance in HBM chips gives Micron strong pricing power and underpins a strong long-term growth outlook. Nonetheless, the HBM chips are in demand due to their capability to manage complex workloads while delivering improved power efficiency.
Also, constrained supply in NAND flash chips is expected to continue through the middle of next year, which could further boost margins. Micron expects a solid gross margin of around 81% for the fiscal third quarter of 2026, showcasing strong financial momentum.
The Bullish Case for NVDA Stock
NVIDIA’s latest strong Data Center performance demonstrated its position as a leader in hyperscale AI infrastructure investment worldwide. In the fiscal first quarter of 2027, NVIDIA’s Data Center segment generated a record $75.2 billion in revenues, up 92% year over year and 21% sequentially, according to nvidia.news.nvidia.com.
NVIDIA reported revenues of $81.6 billion in the fiscal first quarter of 2027, a new record, up 85% from a year ago and 20% sequentially. Despite its massive size, NVIDIA’s revenues continue to grow, driven by strong demand for its cutting-edge AI chips, networking solutions, and data center infrastructure that support large-scale AI training and inference workloads. NVIDIA projects fiscal second-quarter of 2027 revenues of $91 billion, plus or minus 2%.
Additionally, NVIDIA continues to deliver strong margins, reflecting its pricing power in graphics processing units (GPUs) and AI accelerators, while maintaining sustained demand for its products across the AI and data center markets. For the fiscal first quarter of 2027, NVIDIA’s non-GAAP gross margin was 75%, and is expected to remain near 75% for the fiscal second quarter of 2027, a tell-tale sign that the company is capable of maintaining strong profitability.
Micron Has the Edge: Why It’s a Better AI Buy Than NVIDIA Now
Strong AI-infrastructure demand is currently driving the bullish outlook for both Micron and NVIDIA. However, Micron appears to offer a more attractive valuation than NVIDIA at the current levels.
Per the price/earnings ratio, MU trades at 16.65 forward earnings compared with NVDA’s forward earnings multiple of 22.97. Since NVIDIA trades at a premium valuation, the company needs to deliver strong growth to justify further upside. On the other hand, Micron can outperform through steady and sustainable earnings growth.
Image Source: Zacks Investment Research
Additionally, Micron is no longer viewed as a traditional cyclical memory company; it has elevated itself to become a key supplier in the AI infrastructure ecosystem. Micron has sold a significant amount of its HBM capacity through 2026 amid strong AI-driven demand. The HBM supply constraint has given the company a strong pricing power, boosting profit margins, improving revenue visibility and creating further upside potential for the stock.
In contrast, much of NVIDIA’s strong quarterly performance already appears reflected in its share price, and the ongoing China-related export curbs could create pressure on future growth. Therefore, currently Micron looks like the more compelling investment opportunity.
View the Zacks #1 Rank List
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Micron vs. NVIDIA: One AI Stock Is a Clear Buy Right Now
Key Takeaways
Riding the artificial intelligence (AI) boom, Sanjay Mehrotra-led Micron Technology (MU - Free Report) outpaced Jensen Huang-led NVIDIA Corporation (NVDA - Free Report) over the past year, rising 761.5% compared to NVIDIA’s 44.3%. Let us thus see how both companies performed and whether Micron holds an investment edge over NVIDIA –
Image Source: Zacks Investment Research
The Bullish Case for MU Stock
Micron reported revenues of $23.86 billion in the fiscal second quarter of 2026 and expects revenues to improve further to $33.5 billion in the fiscal third quarter, according to investors.micron.com. As hyperscalers increase their spending on AI infrastructure, Micron’s advanced high-bandwidth memory (“HBM”) chips are witnessing high demand, supporting revenue growth.
The present supply-demand imbalance in HBM chips gives Micron strong pricing power and underpins a strong long-term growth outlook. Nonetheless, the HBM chips are in demand due to their capability to manage complex workloads while delivering improved power efficiency.
Also, constrained supply in NAND flash chips is expected to continue through the middle of next year, which could further boost margins. Micron expects a solid gross margin of around 81% for the fiscal third quarter of 2026, showcasing strong financial momentum.
The Bullish Case for NVDA Stock
NVIDIA’s latest strong Data Center performance demonstrated its position as a leader in hyperscale AI infrastructure investment worldwide. In the fiscal first quarter of 2027, NVIDIA’s Data Center segment generated a record $75.2 billion in revenues, up 92% year over year and 21% sequentially, according to nvidia.news.nvidia.com.
NVIDIA reported revenues of $81.6 billion in the fiscal first quarter of 2027, a new record, up 85% from a year ago and 20% sequentially. Despite its massive size, NVIDIA’s revenues continue to grow, driven by strong demand for its cutting-edge AI chips, networking solutions, and data center infrastructure that support large-scale AI training and inference workloads. NVIDIA projects fiscal second-quarter of 2027 revenues of $91 billion, plus or minus 2%.
Additionally, NVIDIA continues to deliver strong margins, reflecting its pricing power in graphics processing units (GPUs) and AI accelerators, while maintaining sustained demand for its products across the AI and data center markets. For the fiscal first quarter of 2027, NVIDIA’s non-GAAP gross margin was 75%, and is expected to remain near 75% for the fiscal second quarter of 2027, a tell-tale sign that the company is capable of maintaining strong profitability.
Micron Has the Edge: Why It’s a Better AI Buy Than NVIDIA Now
Strong AI-infrastructure demand is currently driving the bullish outlook for both Micron and NVIDIA. However, Micron appears to offer a more attractive valuation than NVIDIA at the current levels.
Per the price/earnings ratio, MU trades at 16.65 forward earnings compared with NVDA’s forward earnings multiple of 22.97. Since NVIDIA trades at a premium valuation, the company needs to deliver strong growth to justify further upside. On the other hand, Micron can outperform through steady and sustainable earnings growth.
Image Source: Zacks Investment Research
Additionally, Micron is no longer viewed as a traditional cyclical memory company; it has elevated itself to become a key supplier in the AI infrastructure ecosystem. Micron has sold a significant amount of its HBM capacity through 2026 amid strong AI-driven demand. The HBM supply constraint has given the company a strong pricing power, boosting profit margins, improving revenue visibility and creating further upside potential for the stock.
In contrast, much of NVIDIA’s strong quarterly performance already appears reflected in its share price, and the ongoing China-related export curbs could create pressure on future growth. Therefore, currently Micron looks like the more compelling investment opportunity.
While Micron has a Zacks Rank #1 (Strong Buy), NVIDIA has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.