Lam Research vs. Micron: Which Semiconductor Stock Is the Better Bet?

Lam Research Corporation LRCX and Micron Technology, Inc. MU stand at the center of the semiconductor boom, but they operate in very different areas. Lam Research supplies the advanced machines used to build chips, especially for newer technologies that power artificial intelligence (AI) and high-performance computing, while Micron focuses on making memory chips like DRAM and NAND.

Both companies are benefiting from the rise of AI, but their business models, risk profiles and long-term outlooks differ. Let’s break down how each company is performing and which one looks like the better investment right now.

The Case for Lam Research Stock

Lam Research is capitalizing on AI trends. It builds the tools chipmakers need to manufacture next-generation semiconductors, including high-bandwidth memory (HBM) and chips used in advanced packaging. These technologies are vital for powering AI and cloud data centers.

Lam Research’s products are not only critical but also innovative. For example, its ALTUS ALD tool uses molybdenum to improve speed and efficiency in chip production. Another product, the Aether platform, helps chipmakers achieve higher performance and density. These are essential capabilities as demand for advanced AI chips increases.

In 2024, Lam Research’s shipments for gate-all-around nodes and advanced packaging exceeded $1 billion, and management expects this figure to triple to more than $3 billion in 2025. Additionally, the industry’s migration to backside power distribution and dry-resist processing presents growth opportunities for LRCX’s cutting-edge fabrication solutions.

These trends are aiding Lam Research’s financial performance. In the fourth quarter of fiscal 2025, the company reported revenues of $5.17 billion, up 34% year over year, and non-GAAP EPS of $1.33, highlighting a 64% increase.

The Case for Micron Stock

Micron 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’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 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 third quarter of fiscal 2025, its revenues and non-GAAP EPS soared 37% and 208%, respectively, year over year.

Micron is also riding on a strong wave of 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 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.

LRCX vs. MU: Which Has a Greater Growth Profile?

Looking at the Zacks Consensus Estimates for revenues and EPS, Micron has a better growth profile than Lam Research. The consensus mark for Micron’s fiscal 2026 revenues and non-GAAP EPS indicates year-over-year growth of 33.9% and 60.7%, respectively.

Micron Growth Outlook

On the other hand, the Zacks Consensus Estimates for Lam Research indicate a slowing growth trend for the company. The consensus mark for fiscal 2026 revenues and non-GAAP EPS suggests year-over-year growth of 6% and 2.2%, respectively.

Lam Research Growth Outlook

Valuation: Lam Research Trades at a Higher Premium

When comparing valuations, Lam Research currently trades at a higher forward 12-month price-to-earnings (P/E) multiple of 25.69 compared to Micron’s 11.46. This suggests investors are paying a larger premium for LRCX stock, even though its forward earnings growth profile is significantly lower than Micron’s.

Comparing the two stocks’ price performance, Micron has soared 78.9% year to date, outperforming Lam Research’s gain of 60%.

Conclusion: Micron Looks Like the Smarter Bet

Both Micron and Lam Research are positioned to gain from AI. However, MU’s higher EPS growth projection and lower valuation P/E multiple than LRCX make it a better investment choice right now.

Currently, Micron sports a Zacks Rank #1 (Strong Buy), making the stock a must-pick compared with LRCX, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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