NVIDIA vs. Micron: Which AI Chip Stock Is a Better Investment Option?

Core Insights - NVIDIA Corporation (NVDA) and Micron Technology, Inc. (MU) are pivotal in the AI semiconductor ecosystem, driven by increasing demand for data center and AI computing [1] - Both companies present different risk-reward profiles for investors in the semiconductor sector [2] NVIDIA Overview - NVIDIA is central to the AI boom, with its GPUs utilized in cloud data centers and self-driving vehicles, dominating the AI infrastructure market [3] - In Q3 of fiscal 2026, NVIDIA's revenues increased by 62% year-over-year to $57 billion, and non-GAAP EPS rose by 60% to $1.30 [3] - The Data Center segment generated $51.22 billion in revenues, accounting for 89.8% of total sales, with a 66% year-over-year increase and 25% sequential growth [5] - NVIDIA's partnership with OpenAI is expected to enhance long-term demand for its GPUs, solidifying its position as a leading AI chip supplier [6] Micron Overview - Micron Technology is well-positioned for long-term growth due to its involvement in AI, high-performance data centers, and industrial IoT [7] - The company reported a 57% year-over-year revenue increase to $13.64 billion in Q1 of fiscal 2026, with non-GAAP EPS rising by 167% to $4.78 [9] - Micron's diversification strategy has led to a more stable revenue base, focusing on resilient sectors like automotive and enterprise IT [8] - Micron's HBM3E products are in high demand, with supply already sold out for 2026, indicating strong market interest [11] Growth Outlook Comparison - Micron's growth profile appears stronger in the near term, with projected fiscal 2026 revenues and EPS expected to surge by 94.7% and 297.5%, respectively, compared to NVIDIA's 92.9% revenue growth and 55.9% EPS increase [13] - Analysts are increasingly bullish on Micron, as reflected in the earnings estimate revision trends [14] Price Performance and Valuation - Over the past year, Micron's stock has surged by 243%, significantly outperforming NVIDIA's 35.2% gain [17] - Micron trades at a lower forward P/E multiple of 9.84 compared to NVIDIA's 25.78, indicating a more attractive valuation despite higher growth projections for Micron [18] Conclusion - Micron Technology is identified as the better investment option due to its higher EPS growth projection and lower valuation compared to NVIDIA [21]