AMD vs. Micron Technology: Which Semiconductor Stock Has More Upside?

Core Insights - Advanced Micro Devices (AMD) and Micron Technology (MU) are key players in the semiconductor industry, with AMD focusing on CPUs, GPUs, and integrated circuits, while Micron specializes in memory and storage solutions [1] - The semiconductor industry is projected to grow from $631.01 billion in 2025 to $958.93 billion by 2030, at a CAGR of 8.73%, driven by demand for AI and data center technologies [2] AMD Insights - AMD's data center revenues surged 57.2% year over year to $3.674 billion in Q1 2025, accounting for 49.4% of total revenues, driven by EPYC processors and Instinct GPU sales [4] - The company is enhancing its presence in the AI market with a new end-to-end AI platform and the introduction of the Instinct MI350 Series GPUs, which offer 4x generational AI compute gains [5] - AMD is leveraging 7nm process technology from Taiwan Semiconductor Manufacturing Company to deliver advanced chips more rapidly, with its Radeon RX 7900 series utilizing a combination of 5nm and 6nm process nodes [6] Micron Technology Insights - Micron is benefiting from the expanding AI-driven memory and storage markets, with significant inventory improvements contributing to top-line growth [7] - The company's high bandwidth memory (HBM) products are in high demand, with HBM revenues exceeding $1 billion in Q2 FY25, driven by AI and data center needs [8] - Micron has begun shipping HBM4 36GB 12-high memory samples, which offer industry-leading power efficiency and performance for next-gen AI data center platforms [9] Stock Performance and Valuation - Year-to-date, AMD shares have appreciated by 14.6%, while MU shares have increased by 44.6%, with MU's performance attributed to the expanding AI-driven memory and storage markets [10] - Micron's 2025 EPS estimate rose by 12.1% to $7.77, indicating a year-over-year growth of 497.69%, while AMD's EPS estimate is $3.92, reflecting an 18.43% increase [11][15] - Both AMD and MU shares are currently considered overvalued, with AMD trading at a forward Price/Sales ratio of 6.52X compared to MU's 2.90X [13] Earnings Estimates and Surprises - The Zacks Consensus Estimate for AMD's 2025 earnings has declined by 1.2% over the past 30 days, while MU's estimate has increased by 12.1% [15] - Both companies have consistently beaten earnings estimates in the trailing four quarters, with MU delivering a higher average surprise of 9.70% compared to AMD's 2.30% [16] Conclusion - While both AMD and Micron are positioned to benefit from the AI-driven semiconductor boom, MU appears to have more upside potential due to its strong earnings growth, expanding HBM demand, and better valuation metrics [17] - MU currently holds a Zacks Rank 2 (Buy), while AMD has a Zacks Rank 3 (Hold), indicating a stronger investment case for Micron [18]