Key Points
Nvidia (NASDAQ: NVDA) has been the top dog in the artificial intelligence (AI) investment space since the AI arms race kicked off in 2023. However, in 2026, it appears to have lost its crown to several others, including Micron (NASDAQ: MU). In 2026 alone, Micron is up around 250%, while Nvidia has risen 12%. That’s a stark performance gap, but is Micron actually a better AI investment than Micron?
These two are peers in real life and operate in similar business segments. However, the market conditions for each of their products differ, and each stock may not be suitable for all investors.
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Micron operates in a cyclical market
Micron makes memory chips used in computing units, like the GPUs Nvidia makes. Other companies also use memory chips, and there are several other uses for them in an AI data center as well.
However, there isn’t a ton that separates one memory chip producer from another, so Nvidia could also use memory from competitors if the supply is available. This makes memory chips more of a commodity, making them highly subject to supply-and-demand forces.
Right now, there is a low supply and high demand, causing prices to skyrocket. This mechanism is what has boosted Micron’s stock throughout 2026, and although the memory chip shortage is expected to last for the foreseeable future, it likely won’t last forever.
Nvidia’s GPUs and the products that support them have attributes that make them more desirable than the competition’s, so it can charge a premium. This has worked out for Nvidia, as its products are the industry standard in data centers. As long as there is demand for AI computing capacity, Nvidia’s business will stay strong and likely outlast the demand curve that Micron is experiencing.
Furthermore, even after the AI build-out is complete, there will be demand to refresh old hardware and replace failing units. This will create residual demand that Nvidia must fulfill year after year, making it a solid long-term investment pick.
Nvidia is a more long-term stable business, giving it the win in this category.
Winner: Nvidia
Nvidia is growing fast, but not fast enough
During Nvidia’s latest quarter, it reported 85% year-over-year growth. Next quarter, Wall Street analysts expect nearly 100% year-over-year growth. That’s simply incredible for the world’s largest company, but it still isn’t enough to pass Micron.
Micron’s revenue growth was a jaw-dropping 346% in its most recent quarter, and Wall Street expects 349% growth in its next quarter. Micron is benefiting massively from soaring memory chip prices, which are translating into unreal revenue growth for it.
By the end of fiscal year 2027 (ending August 2027), Wall Street expects an additional 84% growth for Micron, while it estimates only 42% for Nvidia. Both figures are impressive, but Micron is growing much faster.
Winner: Micron
Valuing Micron isn’t easy
Lastly, let’s look at valuation. From this standpoint, it would be easy to declare Micron a winner, as it trades at a far lower price than Nvidia.
MU PE Ratio (Forward) data by YCharts
But this isn’t a closed case. Cyclical companies like Micron trade at a discount to peers because a turn in the memory chip market can spell disaster for the stock. So, the market discounts the stock to adjust for the risk.
On the flip side, Nvidia’s stock really isn’t priced all that expensive at 23 times forward earnings, especially when you consider the S&P 500 (SNPINDEX: ^GSPC) trades for 21.5 times forward earnings.
So, who is the winner here?
I think it depends on your situation.
If you’re willing to monitor the stock closely and want ultimate upside, Micron is the better bet, but it does have more risk. On the flip side, if you want solid, market-beating returns with less risk, then Nvidia is the better stock pick.
I’m taking Nvidia overall, but that’s more a matter of personal preference, as they are both great AI stock picks.
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Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
