Micron vs. Texas Instruments: Which Chip Stock Is the Better Buy Now?

Micron Technology, Inc. MU and Texas Instruments Incorporated TXN stand at the center of the semiconductor boom, but they operate in very different areas. Micron Technology focuses on making memory chips like DRAM and NAND. Meanwhile, Texas Instruments designs analog and embedded chips that power countless devices, from cars and industrial machines to consumer electronics.Both companies are essential to the global chip supply chain, but they thrive in different corners of the market. With the semiconductor sector continuing to evolve rapidly, investors are wondering which stock has stronger upside potential. Let’s examine their fundamentals, growth drivers, challenges and valuations to see which offers a better long-term opportunity.The Case for Micron TechnologyMicron Technology sits at the heart of several transformative tech trends. Its exposure to AI, high-performance data centers, autonomous vehicles and industrial IoT uniquely positions the company for sustainable long-term growth. As AI adoption accelerates, the demand for advanced memory solutions like DRAM and NAND is soaring. Micron Technology’s investments in next-generation DRAM and 3D NAND ensure it remains competitive in delivering the performance needed for modern computing.The company’s diversification strategy is also bearing fruit. Micron Technology has created a more stable revenue base by shifting its focus away from the more volatile consumer electronics market and toward resilient verticals such as automotive and enterprise IT. This balance enhances its ability to weather cyclical downturns. In the fourth quarter of fiscal 2025, its revenues and non-GAAP EPS soared 46% and 157%, respectively, year over year.Micron Technology is also riding on a strong wave of high-bandwidth memory (HBM) demand. Its HBM3E products are attracting significant interest due to their superior energy efficiency and bandwidth, which are ideal for AI workloads.In January 2025, NVIDIA confirmed that Micron Technology is a core HBM supplier for its GeForce RTX 50 Blackwell GPUs, signaling deep integration in the AI supply chain. Additionally, its newly announced HBM advanced packaging facility in Singapore, set to launch in 2026 with expansion in 2027, underscores the company’s commitment to scaling production for AI-driven markets.The continuously evolving new tech trends and diversification strategy are likely to aid Micron Technology’s growth over the long run. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates a year-over-year improvement of 42.4% and 14.8%, respectively. The consensus mark for EPS suggests a robust year-over-year increase of 100% for fiscal 2026 and 12% for fiscal 2027.Image Source: Zacks Investment ResearchThe Case for Texas InstrumentsTexas Instruments focuses on analog and embedded chips. These chips are widely used in industrial systems, cars and consumer electronics. The company sees long-term growth opportunities in areas like robotics, electric vehicles and infrastructure automation. Its embedded processors and analog chips are key components in these systems.To maintain its dominance across industries, TXN is prioritizing chip manufacturing within its internal manufacturing facilities instead of relying on outside foundries. The company aims to manufacture more than 95% of its wafers internally by 2030. By building its internal manufacturing, the company will gain better control over production, quality and costs. Texas Instruments has been awarded up to $1.6 billion in CHIPS Act funding, with total benefits from the program expected to reach $7.5 billion to $9.5 billion over its lifetime.Financially, the company is performing well. In the second quarter of 2025, Texas Instruments’ revenues soared 16% year over year to $4.45 billion, while non-GAAP EPS jumped 15.6% to $1.41.Despite its strength, Texas Instruments is encountering some challenges. The company faces significant exposure to geopolitical risks, particularly in China, which accounted for approximately 20% of its 2024 revenues. While the company reported growth in China during the second quarter, rising geopolitical tensions and potential trade restrictions could impact future performance.Furthermore, slow recovery across the automotive end market might hurt Texas Instruments’ overall growth prospects. Its automotive segment is recovering slowly compared to other markets. The Zacks Consensus Estimate for TXN’s 2025 and 2026 revenues indicates year-over-year growth of 13% and 8.7%, respectively. The consensus mark for EPS suggests a year-over-year improvement of 7.7% for 2025 and 14.9% for 2026.Image Source: Zacks Investment ResearchMU vs. TXN: Price Performance and ValuationYear to date, Micron Technology shares have surged 133.5%, while Texas Instruments declined 3.2%.MU vs. TXN: YTD Price Return PerformanceImage Source: Zacks Investment ResearchOn the valuation front, MU looks more attractive than TXN. Micron trades at a forward 12-month P/E multiple of 11.7, significantly lower than Texas Instruments’ 29.1.MU vs. TXN: Forward 12-Month P/E MultipleImage Source: Zacks Investment ResearchConclusion: Buy MU Stock for NowWhile both Micron Technology and Texas Instruments play important roles in the chip industry, MU stands out as the better stock to own right now. Micron Technology’s fundamentals remain strong, and its position in the AI-driven memory market is well-established. The company offers compelling long-term growth potential, maintains a disciplined approach to innovation and has a more favorable valuation.Micron Technology sports a Zacks Rank #1 (Strong Buy), making it a clear winner over Texas Instruments, which has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank 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 Texas Instruments Incorporated (TXN): Free Stock Analysis Report Micron Technology, Inc. (MU): 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