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Micron vs. Texas Instruments: Which Semiconductor Stock Has the Edge?
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Key Takeaways
MU emerges as the better semiconductor stock, backed by AI memory demand, faster growth and a lower valuation.
Micron's FY27 revenues are projected to grow 108.4% compared with 12.5% growth for Texas Instruments in 2027.
MU has surged 200.1% YTD versus TXN's 61.1%, while trading at a much lower forward P/E of 4.69X versus 28.76X.
Micron Technology, Inc. (MU - Free Report) and Texas Instruments Incorporated (TXN - Free Report) are two major U.S. semiconductor manufacturers benefiting from rising chip demand, but their growth drivers differ.
Micron specializes in DRAM, NAND and high-bandwidth memory (HBM) for artificial intelligence (AI) and data centers, while Texas Instruments supplies analog and embedded processing chips for industrial, automotive and other markets. With Micron riding an AI-driven memory boom and Texas Instruments benefiting from a recovery in chip demand, which stock offers the better investment opportunity?
Their latest quarterly results, growth prospects and valuations provide important clues. Let’s delve deeper.
MU: AI Memory Demand Creates Growth Opportunity
Micron delivered exceptional fourth-quarter fiscal 2026 results, with revenues surging to $54.23 billion from $11.32 billion a year-ago quarter. Fourth-quarter non-GAAP earnings of $33.42 per share jumped more than 11-fold from $3.03 in the year-ago quarter. Full-fiscal 2026 revenues reached $133.19 billion, more than tripling from fiscal 2025, while data center revenues quadrupled. Fiscal 2026 non-GAAP earnings increased to $75.52 per share from $8.29 in fiscal 2025, and management expects fiscal 2027 to be even stronger.
Micron Technology, Inc. Price, Consensus and EPS Surprise
AI infrastructure expansion is a major growth driver. Demand for HBM, server DRAM and data center SSDs is increasing as AI models require greater memory capacity and faster data access. Micron's fourth-quarter data center SSD revenues approached $10 billion, more than 10 times the year-ago level. It has also secured agreements covering most of its calendar year 2027 HBM supply, with higher prices expected to improve profitability.
Long-term strategic customer agreements offer another advantage. Micron reported 26 such agreements, representing an estimated more than 35% of revenues through 2030, alongside $32 billion in customer financial commitments. Its first-quarter fiscal 2027 revenue guidance of $61.5 billion, plus or minus $1.5 billion, signals continued momentum.
However, Micron remains exposed to memory-price swings, supply-demand changes and heavy manufacturing investment. Its expansion plans also require time and capital before new facilities contribute meaningfully. Any slowdown in AI spending or easing of memory shortages could pressure earnings.
TXN: Broad-Based Recovery Supports Steady Growth
Texas Instruments reported third-quarter 2026 revenues of $6.06 billion, up 28% year over year and 10.8% sequentially. Net income increased 78% to $2.43 billion, while earnings per share rose 77% to $2.62. Both analog and embedded processing businesses recorded year-over-year growth, reflecting improving demand across major end markets.
Texas Instruments Incorporated Price, Consensus and EPS Surprise
Industrial revenues increased more than 40% year over year, automotive revenues grew in the mid-teens, and data center revenues climbed approximately 95%. This broad-based recovery strengthens TXN's growth outlook beyond AI alone. Its manufacturing strategy, including 300mm wafer production, also supports long-term cost efficiency.
Texas Instruments generates substantial cash to fund investments and shareholder returns. Operating cash flow reached $9.9 billion over the trailing 12 months, while free cash flow totaled $8.4 billion. The company returned $5.8 billion to shareholders during this period and announced a 7% dividend increase, extending its streak of annual dividend increases to 23 years.
Nevertheless, TXN faces challenges. Its fourth-quarter 2026 revenue guidance of $5.8 billion to $6.3 billion suggests that sequential growth could moderate. Industrial and automotive demand can fluctuate with economic conditions, while manufacturing investments require substantial capital.
MU vs. TXN: Which Stock Has a Better Growth Profile?
Analysts’ projections suggest Micron has a better growth profile than Texas Instruments. The Zacks Consensus Estimate for MU’s fiscal 2027 revenues and EPS indicates a year-over-year increase of 108.4% and 135.3%, respectively. For fiscal 2028, the consensus marks for revenues and EPS suggest year-over-year growth of 22.4% and 19.2%, respectively.
Meanwhile, the Zacks Consensus Estimate for Texas Instruments’ 2026 revenues and EPS indicates a year-over-year increase of 23.4% and 55.8%, respectively. For 2027, the consensus marks for revenues and EPS suggest year-over-year growth of 12.5% and 18.3%, respectively.
MU vs. TXN: Which Stock Has the Better Valuation?
Micron has a clear valuation advantage, trading at a forward 12-month price-to-earnings (P/E) multiple of just 4.69 compared with Texas Instruments' 28.76. This substantial gap makes MU appear significantly cheaper relative to earnings.
Image Source: Zacks Investment Research
The share price performance also favors Micron. MU has soared 200.1% year to date (YTD), substantially outperforming TXN's 61.1% gain. Although both stocks have benefited from rising semiconductor demand, Micron's stronger earnings momentum and AI-related opportunities demonstrate its superior performance.
Image Source: Zacks Investment Research
Texas Instruments deserves a premium for its diversified end markets, cash generation and consistent dividend growth. However, investors buying TXN at 29.3X earnings are paying considerably more for its established business model. Micron's low valuation, combined with management's expectation of tighter memory supply conditions in fiscal 2027 and 2028, presents a more compelling growth-oriented opportunity.
Conclusion: MU Stock Has the Edge
Micron appears to be the better investment bet today. Its record fiscal 2026 results, expanding HBM business, rapidly growing data center SSD revenues and long-term customer agreements provide strong reasons to expect further growth. Its 4.69 forward 12-month P/E multiple also offers a substantial valuation advantage over Texas Instruments' 28.76.
Texas Instruments remains attractive for investors seeking cash generation, dividend growth and exposure to industrial and automotive recovery. However, for investors prioritizing earnings growth and AI-driven opportunities, Micron offers a stronger combination of growth potential and valuation appeal.
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Micron vs. Texas Instruments: Which Semiconductor Stock Has the Edge?
Key Takeaways
Micron Technology, Inc. (MU - Free Report) and Texas Instruments Incorporated (TXN - Free Report) are two major U.S. semiconductor manufacturers benefiting from rising chip demand, but their growth drivers differ.
Micron specializes in DRAM, NAND and high-bandwidth memory (HBM) for artificial intelligence (AI) and data centers, while Texas Instruments supplies analog and embedded processing chips for industrial, automotive and other markets. With Micron riding an AI-driven memory boom and Texas Instruments benefiting from a recovery in chip demand, which stock offers the better investment opportunity?
Their latest quarterly results, growth prospects and valuations provide important clues. Let’s delve deeper.
MU: AI Memory Demand Creates Growth Opportunity
Micron delivered exceptional fourth-quarter fiscal 2026 results, with revenues surging to $54.23 billion from $11.32 billion a year-ago quarter. Fourth-quarter non-GAAP earnings of $33.42 per share jumped more than 11-fold from $3.03 in the year-ago quarter. Full-fiscal 2026 revenues reached $133.19 billion, more than tripling from fiscal 2025, while data center revenues quadrupled. Fiscal 2026 non-GAAP earnings increased to $75.52 per share from $8.29 in fiscal 2025, and management expects fiscal 2027 to be even stronger.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. Quote
AI infrastructure expansion is a major growth driver. Demand for HBM, server DRAM and data center SSDs is increasing as AI models require greater memory capacity and faster data access. Micron's fourth-quarter data center SSD revenues approached $10 billion, more than 10 times the year-ago level. It has also secured agreements covering most of its calendar year 2027 HBM supply, with higher prices expected to improve profitability.
Long-term strategic customer agreements offer another advantage. Micron reported 26 such agreements, representing an estimated more than 35% of revenues through 2030, alongside $32 billion in customer financial commitments. Its first-quarter fiscal 2027 revenue guidance of $61.5 billion, plus or minus $1.5 billion, signals continued momentum.
However, Micron remains exposed to memory-price swings, supply-demand changes and heavy manufacturing investment. Its expansion plans also require time and capital before new facilities contribute meaningfully. Any slowdown in AI spending or easing of memory shortages could pressure earnings.
TXN: Broad-Based Recovery Supports Steady Growth
Texas Instruments reported third-quarter 2026 revenues of $6.06 billion, up 28% year over year and 10.8% sequentially. Net income increased 78% to $2.43 billion, while earnings per share rose 77% to $2.62. Both analog and embedded processing businesses recorded year-over-year growth, reflecting improving demand across major end markets.
Texas Instruments Incorporated Price, Consensus and EPS Surprise
Texas Instruments Incorporated price-consensus-eps-surprise-chart | Texas Instruments Incorporated Quote
Industrial revenues increased more than 40% year over year, automotive revenues grew in the mid-teens, and data center revenues climbed approximately 95%. This broad-based recovery strengthens TXN's growth outlook beyond AI alone. Its manufacturing strategy, including 300mm wafer production, also supports long-term cost efficiency.
Texas Instruments generates substantial cash to fund investments and shareholder returns. Operating cash flow reached $9.9 billion over the trailing 12 months, while free cash flow totaled $8.4 billion. The company returned $5.8 billion to shareholders during this period and announced a 7% dividend increase, extending its streak of annual dividend increases to 23 years.
Nevertheless, TXN faces challenges. Its fourth-quarter 2026 revenue guidance of $5.8 billion to $6.3 billion suggests that sequential growth could moderate. Industrial and automotive demand can fluctuate with economic conditions, while manufacturing investments require substantial capital.
MU vs. TXN: Which Stock Has a Better Growth Profile?
Analysts’ projections suggest Micron has a better growth profile than Texas Instruments. The Zacks Consensus Estimate for MU’s fiscal 2027 revenues and EPS indicates a year-over-year increase of 108.4% and 135.3%, respectively. For fiscal 2028, the consensus marks for revenues and EPS suggest year-over-year growth of 22.4% and 19.2%, respectively.
Meanwhile, the Zacks Consensus Estimate for Texas Instruments’ 2026 revenues and EPS indicates a year-over-year increase of 23.4% and 55.8%, respectively. For 2027, the consensus marks for revenues and EPS suggest year-over-year growth of 12.5% and 18.3%, respectively.
MU vs. TXN: Which Stock Has the Better Valuation?
Micron has a clear valuation advantage, trading at a forward 12-month price-to-earnings (P/E) multiple of just 4.69 compared with Texas Instruments' 28.76. This substantial gap makes MU appear significantly cheaper relative to earnings.
Image Source: Zacks Investment Research
The share price performance also favors Micron. MU has soared 200.1% year to date (YTD), substantially outperforming TXN's 61.1% gain. Although both stocks have benefited from rising semiconductor demand, Micron's stronger earnings momentum and AI-related opportunities demonstrate its superior performance.
Image Source: Zacks Investment Research
Texas Instruments deserves a premium for its diversified end markets, cash generation and consistent dividend growth. However, investors buying TXN at 29.3X earnings are paying considerably more for its established business model. Micron's low valuation, combined with management's expectation of tighter memory supply conditions in fiscal 2027 and 2028, presents a more compelling growth-oriented opportunity.
Conclusion: MU Stock Has the Edge
Micron appears to be the better investment bet today. Its record fiscal 2026 results, expanding HBM business, rapidly growing data center SSD revenues and long-term customer agreements provide strong reasons to expect further growth. Its 4.69 forward 12-month P/E multiple also offers a substantial valuation advantage over Texas Instruments' 28.76.
Texas Instruments remains attractive for investors seeking cash generation, dividend growth and exposure to industrial and automotive recovery. However, for investors prioritizing earnings growth and AI-driven opportunities, Micron offers a stronger combination of growth potential and valuation appeal.
Currently, Micron and Texas Instruments each sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.