Micron & NVIDIA: The Kings of AI Stocks

Micron MU is a world leader in innovative memory and storage solutions that accelerate the transformation of information into intelligence. Shares have been red hot on the back of the AI frenzy, with its solutions a massively important piece of the infrastructure given the common issue of memory bottlenecks.

The stock is a perfect example of the Zacks Rank in action, as shown below. The company was thrust into the highly-coveted Zacks Rank #1 (Strong Buy) in August of last year thanks to rising EPS revisions, with shares soaring since.

As we can see above, the Zacks Rank also could’ve helped limit some downside last March.

Don't Underestimate Micron

Micron’s latest results were stellar, posting a double-beat relative to our consensus expectations and being lifted by accelerating demand for AI services. Sales were up more than 55% YoY to a new record, whereas adjusted EPS climbed an even more impressive 185%.

Its cash-generating abilities have also been amplified during the favorable demand environment, reflecting yet another massive positive. Specifically, operating cash flow of $8.4 billion in the above-mentioned period also reflected a record, crushing the $5.7 billion print in the same period last year.

And the positivity doesn’t look to stop anytime soon, with its Q2 guidance (next release) reflecting records across sales, margins, EPS, and free cash flow. Simply put, the company enables the AI frenzy in a big way, as memory is often a bottleneck for systems. It’s positioned the company in a great spot overall, with its critical role in the frenzy also insulating it from criticism of being a potential AI ‘loser’.

As shown below, Micron’s sales have melted higher over recent periods, underpinning the favorable demand picture. Its top line is similar to what we’ve seen with NVIDIA NVDA, the poster-child of the AI trade overall.

Micron or NVIDIA?

While many AI-related companies will likely face heavy scrutiny in 2026, Micron reflects a much clearer play on the buildout overall. Memory is often a big bottleneck, with MU capitalizing in a big way on the issue. The company even recently announced its exit of the consumer memory market, further displaying its commitment to maximizing its sales through large enterprises.

The company stated, “The AI-driven growth in the data center has led to a surge in demand for memory and storage. Micron has made the difficult decision to exit the Crucial consumer business in order to improve supply and support for our larger, strategic customers in faster-growing segments.”

Overall, the stock is one of the best AI plays out there, similar to NVIDIA. While NVIDIA capitalizes on the GPU side, Micron is doing the same through memory solutions that these AI GPUs need to compute efficiently.

And concerning NVIDIA, it yet again posted a double-beat relative to our consensus expectations in its latest record-setting release, with sales of $57 million growing 62% alongside a 67% jump in EPS. Data Center revenue of $51.2 billion grew a rock-solid 66% from the year-ago period, which also crushed our consensus estimate of $49.1 billion.

For those wanting to ride the AI infrastructure wave, both Micron MU and NVIDIA NVDA reflect top-tier options, with both sporting the highly-coveted Zacks Rank #1 (Strong Buy).

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

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