Micron or NVIDIA: Which AI Stock Looks Attractive and Worth a Buy?

The rise of artificial intelligence (AI) has been a blessing in disguise for two prominent semiconductor stocks, NVIDIA Corporation NVDA and Micron Technology, Inc. MU. Both companies have posted strong quarterly performance recently, prompting investors to wonder which is the better buy right now and why. Let’s see –  Reasons to Be Bullish on Micron Surging demand for Micron’s AI-focused high-bandwidth memory (HBM) chips helped the company post strong fiscal fourth-quarter and full-year results. For the fiscal fourth quarter, Micron’s revenues reached $11.32 billion, up from more than $7.75 billion a year earlier. The company’s net income was $3.2 billion, or $2.83 per share, compared to more than $887 million, or 79 cents per share, in the same period last year. For the full fiscal year 2025, Micron’s revenues totaled $37.38 billion, up from over $25.11 billion the previous year. Net income was a healthy $8.54 billion, or $7.59 per diluted share. Most importantly, in the latest reported quarter, Micron’s key cloud memory business unit reported $4.54 billion in sales, more than tripling year over year. Leveraging the demand for HBM chips, known for their ability to reduce power consumption and process large volumes of data, Micron has raised its fiscal first-quarter revenue guidance to $12.5 billion. Micron’s CEO, Sanjay Mehrotra, expressed strong optimism about the company’s future, stating that they are “entering fiscal 2026 with strong momentum and our most competitive portfolio to date. As the only U.S.-based memory manufacturer, Micron is uniquely positioned to capitalize on the AI opportunity ahead,” citing investors.micron.com. And why shouldn’t he? The rising demand for Micron’s HBM chips, used in some of NVIDIA’s semiconductors and several AI-enabled smartphones, is likely to boost Micron’s performance soon. Additionally, Micron’s initiative to increase chip production in the United States helps shield the company from tariff-related risks. Reasons to Be Bullish on NVIDIA NVIDIA has recently strengthened its partnership with one of its largest customers, further solidifying its position as a leading provider of AI training and development in the tech industry. NVIDIA has pledged to invest $100 billion in the San Francisco startup, OpenAI. This deal will involve supplying at least 10 gigawatts of NVIDIA systems to OpenAI. Also, NVIDIA’s plan to invest $5 billion in Intel common stock will help develop niche products for data centers and personal computers, improving application performance across hyperscalers and consumers (read more: Is NVIDIA's $5B Stake a Signal to Buy, Hold, or Sell Intel Stock?). Nonetheless, NVIDIA’s dominance in AI hardware and its wide moat, thanks to its CUDA software platform, should fuel its growth. Don’t forget, NVIDIA already saw a 56% year-over-year increase in its fiscal second-quarter revenues, reaching $46.7 billion, driven by sales of its cutting-edge Blackwell chips, citing nvidianews.nvidia.com. Furthermore, despite ongoing U.S.-China trade issues, NVIDIA successfully sold its H20 chips to other customers, indicating that tariffs haven't negatively impacted its performance. NVIDIA’s Valuation Looks Stretched - Is Micron the Smarter AI Bet? The booming demand for Micron’s HBM chips and NVIDIA’s substantial rise in sales of data center graphics processing units (GPUs) not only boosted their latest respective quarterly performances but also provided sufficient reasons for stakeholders to remain invested in the stocks, reaping benefits in the future. However, for a new investor, a closer look at valuation metrics indicates that Micron is more affordable than NVIDIA. Based on the price-to-earnings (P/E) ratio, Micron trades at 12.56 times forward earnings compared to NVIDIA’s forward earnings multiple of 40.11. Thus, the substantial valuation gap shows that, relative to Micron, NVIDIA appears overpriced, making Micron an attractive buy for now. Image Source: Zacks Investment ResearchMicron stock has a Zacks Rank #1 (Strong Buy), while NVIDIA has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Micron Technology, Inc. (MU): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks