AI Chip Stocks: AMD vs. Micron – Which Is the Best Buy Now?

The rapid rise in artificial intelligence (AI) applications has triggered immense demand for powerful AI chips. Major cloud service providers, hyperscale companies, and governments are heavily investing in their cloud infrastructures to handle advanced AI workloads. This surge has propelled the growth of leading semiconductor firms, particularly Advanced Micro Devices (AMD) and Micron Technology (MU).

Over the past three months, AMD's stock has jumped 32%, while Micron shares have soared 36%, both outperforming the broader market thanks to robust earnings and a bullish AI outlook. If you’re considering which AI semiconductor stock deserves your attention right now, here’s a detailed breakdown.

Why AMD Is Winning in the AI Chip Market

AMD is known for designing high-performance chips for personal computers, servers, gaming consoles, robotics, automotive, and industrial automation. The AI revolution has boosted demand in all these sectors, translating to impressive revenue and profit growth for AMD.

In the first quarter of 2025, AMD’s revenue shot up 36% year-over-year to $7.4 billion, with non-GAAP earnings per share rising 55% to $0.96. The company’s data center and PC segments, which made up 81% of its total revenue, powered this growth. Data center revenue alone surged 57%, while PC chip sales climbed 68% over the previous year.

A key growth engine is AMD’s strong presence in AI data center chips, where it sells both CPUs and GPUs. The company projects the AI accelerator chip market could reach $500 billion in annual revenue by 2028, suggesting AMD’s data center growth is far from over. With last year’s data center revenues nearly doubling from the prior year, and new high-performance chips on the horizon, AMD is well-positioned to take share from competitors like Nvidia.

Meanwhile, AMD is continually expanding its footprint in the booming AI PC market, forecasted to grow shipments at 42% annually through 2028. Wall Street expects AMD’s earnings to rise 17% this year and accelerate to 45% growth in 2026, reaffirming its status as a leading AI stock for the future.

Why Micron Technology Stands Out in AI

Micron Technology manufactures cutting-edge memory chips essential for computing and storage in AI accelerators, PCs, smartphones, and automotive systems. Top chipmakers including AMD and Nvidia rely on Micron’s memory technology. Lately, demand has soared for high-bandwidth memory (HBM), a specialized chip critical for processing massive AI data workloads at high speeds.

Micron's HBM product line is already sold out for the year, prompting the company to increase its capital spending to $14 billion this fiscal year, up from $8.1 billion previously. This focus is strategic, as the HBM market is projected to nearly triple to $100 billion in annual revenue by 2030.

Micron chips are also seeing higher demand in PCs and smartphones, driven by increasing memory requirements for AI functions. As AI adoption grows, smartphones are being designed with more DRAM—many new models will feature 12GB or more, compared to the current average of 8GB. AI-enabled PCs require at least 16GB of DRAM, a sizeable jump from last year. This ramping content, alongside tight supplier inventories, is driving up memory prices and lifting Micron’s profits.

Micron’s adjusted earnings per share more than tripled last quarter to $1.91, as revenue grew 37% year-over-year. Analysts forecast that Micron’s earnings could rise sixfold in the current fiscal year, with strong momentum projected to continue.

AMD vs. Micron: Which Stock Is the Better AI Play?

Both AMD and Micron are delivering strong earnings and capitalizing on the AI chip boom. However, Micron’s higher growth rate, fueled by tight memory supply and surging prices, makes it a particularly compelling pick right now. On top of that, Micron is trading at a much lower valuation compared to AMD, providing a rare combination of growth and value.

That said, AMD’s robust market share gains, innovation pipeline, and long-term growth prospects also make it a strong contender for investors seeking exposure to the AI semiconductor space.

Bottom line: If you're looking for high growth at an attractive price, Micron could be the superior near-term opportunity. Nevertheless, both companies are well-poised to benefit from the ongoing expansion in AI, offering compelling reasons to hold either stock over the long haul.

This content is for informational purposes only and does not constitute financial advice.