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Micron vs. AMD: Only One AI Stock Looks Like a Better Buy Now
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Key Takeaways
Micron's HBM demand drove fiscal Q3 revenues to $41.46 billion, with $50 billion projected for fiscal Q4.
AMD expects Q3 revenues of $13 billion as EPYC, Instinct and Helios products gain momentum.
Micron's 72.5% ROE and 13.16 forward P/E compare favorably with AMD's 14.9% ROE and 68.68 P/E.
With the rise of artificial intelligence (AI), both Micron Technology, Inc. (MU - Free Report) and Advanced Micro Devices, Inc. (AMD - Free Report) have benefited immensely, delivering strong revenue growth and profitability in their latest quarterly results. However, if investors had to choose between the two, which stock should it be?
Let’s take a look –
Reasons to Be Bullish on Micron
Micron’s revenues for the fiscal third quarter of 2026 reached $41.46 billion, up from $9.3 billion a year earlier and $23.86 billion from the prior quarter, according to the company’s press release.
Exceptionally strong demand for Micron’s cutting-edge high-bandwidth memory (“HBM”) chips boosted the company’s top-line growth. Demand for HBM chips surged as hyperscalers increased spending on AI infrastructure. The HBM chips can efficiently manage complex AI workloads, while offering greater power efficiency.
Micron further expects revenues to rise to $50 billion, plus or minus $1 billion, in the fiscal fourth quarter of 2026, driven largely by continued strength in AI memory demand. The company’s multi-year strategic customer agreements have improved long-term revenue visibility and strengthened growth prospects. Meanwhile, Micron expects a strong gross margin of around 86% for the fiscal fourth quarter, banking on robust demand for its memory products and strong pricing power.
Reasons to Be Bullish on AMD
AMD continues to witness rapid revenue growth along with expanding margins. In the second quarter of 2026, AMD’s revenues were $11.5 billion, up 50% year over year and 13% sequentially, according to the company’s press release. Data Center revenues in particular more than doubled year over year.
Demand for AMD’s EPYC server processors is accelerating, while its Instinct accelerators are scaling rapidly and the Helios platform begins its ramp-up. AMD now expects revenues to increase further to $13 billion, plus or minus $300 million in the third quarter of 2026. From the midpoint, it would be 41% year-over-year and 13% sequential growth. Data Center sales are also expected to accelerate in the second half of 2026.
Additionally, AMD expects a healthy non-GAAP gross margin of 56% for the third quarter, indicating that profitability continues to improve as revenue increases. Thus, AMD will be entering the second half of 2026 with considerable momentum.
Micron or AMD: Which AI Stock Is the Better Buy?
Micron’s revenue and profitability outlook remains strong, driven by rising HBM demand, strategic customer agreements, and favorable pricing. Similarly, AMD’s growth outlook remains strong, driven by accelerating AI and data center demand, increasing product adoption, and improving profitability.
At the same time, both companies are maintaining strong balance sheets and appear well-positioned to navigate broader market volatility. Micron’s current ratio of 3.42 is excellent, given the memory chip industry’s cyclical nature. It provides a liquidity cushion to withstand short-term downturns.
AMD’s current ratio of 2.61 is lower than Micron’s but still indicates the company is financially sound. The lower ratio also suggests AMD is deploying its resources aggressively toward high-growth opportunities rather than holding excessive cash.
Image Source: Zacks Investment Research
However, Micron remains more efficient than AMD at generating returns on shareholders’ equity, as indicated by a higher return on equity (ROE). Micron’s ROE of 72.5% exceeds AMD’s ROE of 14.9%.
Image Source: Zacks Investment Research
Moreover, AMD’s premium valuation requires the company to consistently deliver strong earnings growth to support further upside. But Micron can simply outperform through steady and sustainable earnings growth. Per the price/earnings ratio, MU trades at 13.16 forward earnings compared with AMD’s forward earnings multiple of 68.68.
Image Source: Zacks Investment Research
Therefore, Micron remains a better buy now than AMD as it is more efficient in generating profits and trades at a more attractive valuation. Micron currently has a Zacks Rank #1 (Strong Buy), while AMD has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.
View the Zacks #1 Rank List
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Micron vs. AMD: Only One AI Stock Looks Like a Better Buy Now
Key Takeaways
With the rise of artificial intelligence (AI), both Micron Technology, Inc. (MU - Free Report) and Advanced Micro Devices, Inc. (AMD - Free Report) have benefited immensely, delivering strong revenue growth and profitability in their latest quarterly results. However, if investors had to choose between the two, which stock should it be?
Let’s take a look –
Reasons to Be Bullish on Micron
Micron’s revenues for the fiscal third quarter of 2026 reached $41.46 billion, up from $9.3 billion a year earlier and $23.86 billion from the prior quarter, according to the company’s press release.
Exceptionally strong demand for Micron’s cutting-edge high-bandwidth memory (“HBM”) chips boosted the company’s top-line growth. Demand for HBM chips surged as hyperscalers increased spending on AI infrastructure. The HBM chips can efficiently manage complex AI workloads, while offering greater power efficiency.
Micron further expects revenues to rise to $50 billion, plus or minus $1 billion, in the fiscal fourth quarter of 2026, driven largely by continued strength in AI memory demand. The company’s multi-year strategic customer agreements have improved long-term revenue visibility and strengthened growth prospects. Meanwhile, Micron expects a strong gross margin of around 86% for the fiscal fourth quarter, banking on robust demand for its memory products and strong pricing power.
Reasons to Be Bullish on AMD
AMD continues to witness rapid revenue growth along with expanding margins. In the second quarter of 2026, AMD’s revenues were $11.5 billion, up 50% year over year and 13% sequentially, according to the company’s press release. Data Center revenues in particular more than doubled year over year.
Demand for AMD’s EPYC server processors is accelerating, while its Instinct accelerators are scaling rapidly and the Helios platform begins its ramp-up. AMD now expects revenues to increase further to $13 billion, plus or minus $300 million in the third quarter of 2026. From the midpoint, it would be 41% year-over-year and 13% sequential growth. Data Center sales are also expected to accelerate in the second half of 2026.
Additionally, AMD expects a healthy non-GAAP gross margin of 56% for the third quarter, indicating that profitability continues to improve as revenue increases. Thus, AMD will be entering the second half of 2026 with considerable momentum.
Micron or AMD: Which AI Stock Is the Better Buy?
Micron’s revenue and profitability outlook remains strong, driven by rising HBM demand, strategic customer agreements, and favorable pricing. Similarly, AMD’s growth outlook remains strong, driven by accelerating AI and data center demand, increasing product adoption, and improving profitability.
At the same time, both companies are maintaining strong balance sheets and appear well-positioned to navigate broader market volatility. Micron’s current ratio of 3.42 is excellent, given the memory chip industry’s cyclical nature. It provides a liquidity cushion to withstand short-term downturns.
AMD’s current ratio of 2.61 is lower than Micron’s but still indicates the company is financially sound. The lower ratio also suggests AMD is deploying its resources aggressively toward high-growth opportunities rather than holding excessive cash.
Image Source: Zacks Investment Research
However, Micron remains more efficient than AMD at generating returns on shareholders’ equity, as indicated by a higher return on equity (ROE). Micron’s ROE of 72.5% exceeds AMD’s ROE of 14.9%.
Image Source: Zacks Investment Research
Moreover, AMD’s premium valuation requires the company to consistently deliver strong earnings growth to support further upside. But Micron can simply outperform through steady and sustainable earnings growth. Per the price/earnings ratio, MU trades at 13.16 forward earnings compared with AMD’s forward earnings multiple of 68.68.
Image Source: Zacks Investment Research
Therefore, Micron remains a better buy now than AMD as it is more efficient in generating profits and trades at a more attractive valuation. Micron currently has a Zacks Rank #1 (Strong Buy), while AMD has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.