After Micron's 200%+ Surge, This AI Chip Stock Could Be Next

Micron Technology, Inc.’s MU shares more than tripled last year due to strong artificial intelligence (AI) memory demand. This year, however, NVIDIA Corporation NVDA, another AI-driven semiconductor stock, is positioned to overtake Micron. Let’s see why –  

AI Demand Lifts Micron, Stock Near All-Time High Poses Risks 

The Micron stock has witnessed a stupendous run in recent times, banking on the incessant demand for its high-bandwidth memory (HBM) chips. Thanks to the AI infrastructure expansion, the HBM chips remain in short supply, leading to high demand. The HBM chips are known for lowering power consumption and processing large volumes of data.  

Rising AI workloads have also led to increased investments in dynamic random access memory (DRAM) and NAND solutions, ensuring that graphics processing units (GPUs) remain fully functional. This, in turn, has lifted Micron’s shares.  

Robust demand for Micron’s AI memory chips, combined with tight supply, helped the company deliver strong fiscal first-quarter 2026 results, with revenues reaching $13.64 billion, up 56.8% year over year, as cited in investors.micron.com.  

Looking ahead, Micron expects fiscal second-quarter 2026 revenues to improve further between $18.3 billion and $19.1 billion. The company also anticipates higher earnings, and with a record cash flow of $3.9 billion in fiscal first-quarter 2026, is well-poised to fund its growth initiatives. 

However, Micron’s shares are currently hovering near their all-time high reached in early January 2026, leaving little margin of error. Any missed expectation could lead to a sharp drop, making Micron’s path this year potentially turbulent. 

NVIDIA Set to Outshine Micron as the AI Chip Stock of 2026 

With Micron’s growth outlook uncertain, NVIDIA provides a more assuring path to returns in 2026. This is because the persistent demand for the CUDA software platform and the competitive edge in the AI hardware market are likely to boost NVIDIA’s growth.  

Furthermore, with the significant rise in global data center spending, NVIDIA is well-positioned to sell its in-demand computing hardware. The company’s growth is also supported by the Trump administration’s approval to sell H200 AI chips to “approved customers” in China, providing an additional boost to revenues. It’s highly unlikely that Beijing will totally ban these chips, which are in high demand among Chinese firms. 

NVIDIA’s new-generation Blackwell chips have experienced surging demand and, in all likelihood, will remain highly sought-after in the future. Riding the strong demand for its innovative chips and cloud GPUs, NVIDIA anticipates fiscal fourth-quarter 2026 revenues near $65 billion, with a ±2% margin, citing investor.nvidia.com. 

NVIDIA has already reported fiscal third-quarter 2026 revenues of $57 billion, up 62% year over year. With revenues set to rise, earnings are also expected to climb, likely boosting NVIDIA’s stock price. Consequently, NVIDIA could emerge as the AI chip stock to watch for growth this year, taking the spotlight away from Micron. NVIDIA, anyhow, is trading above its long-term 200-day moving average, signaling a bullish trend (read more: SoundHound Vs. NVIDIA: Which AI Stock Should You Buy Before 2026?).

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NVIDIA currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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

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