Micron Technology(US:MU) The Motley Fool·2025-12-26 09:35Core Viewpoint - Micron Technology is positioned to outperform Nvidia over the next five years due to its strong growth potential in the memory chip market driven by AI demand [3][13]. Company Overview - Nvidia has seen significant gains, with a market cap exceeding $4.4 trillion, but its ability to replicate past performance may be limited due to its size and rising competition in the AI chip market [2][3]. - Micron Technology specializes in memory chips for various applications, including data centers and AI workloads, and is currently experiencing booming demand [4][6]. Financial Performance - Micron's revenue for Q1 fiscal 2026 reached $13.6 billion, a 57% year-over-year increase, with adjusted earnings rising 167% to $4.78 per share [8]. - The company's cloud memory business nearly doubled to $5.3 billion, driven by AI, and it expects Q2 revenue to jump to $18.7 billion, a 2.3 times increase year-over-year [9][10]. Market Trends - Global AI infrastructure spending is projected to reach $758 billion by 2029, with accelerated servers supporting AI workloads expected to grow at a 42% annual rate [11]. - Micron anticipates the high-bandwidth memory (HBM) market to grow at a 40% annual rate through 2028, potentially generating $100 billion in revenue by then [12]. Valuation and Growth Potential - Micron's PEG ratio is 0.53, indicating it is undervalued compared to its growth potential, while Nvidia's PEG ratio is 0.69 [14][15]. - If Micron achieves a conservative earnings growth rate of 10% in fiscal years 2029 and 2030, its share price could reach $872 by 2030, more than triple its current price [18][19].