Nvidia (NVDA) vs. Micron (MU), Who Will Win the 5-Year AI Semiconductor Hegemony?

▲ Nvidia (NVDA), Micron (MU), AI Semiconductor/AI Generated Image

Nvidia (NVDA) has been evaluated as having an advantage over Micron Technology (MU) in the AI semiconductor investment competition over the next five years.

According to Nasdaq on September 4 (local time), Nvidia recorded revenue of $96.2 billion in Q2 FY2027. This is more than double the amount from the same period last year. Revenue in the data center segment increased by 117%. The company forecasts an 89% growth rate for the next quarter and a 70% growth rate for FY2028. It also stated that production capacity is not keeping up with demand.

Nvidia's core competitive strengths are its Graphics Processing Units (GPUs) and the CUDA software ecosystem. A significant portion of early AI code was developed based on CUDA and optimized for Nvidia GPUs. Nvidia is expanding its business beyond AI training to the inference and agentic AI markets. It is also growing server racks, Central Processing Units (CPUs), and networking products as growth pillars. Based on estimated earnings for FY2028, its forward Price-to-Earnings Ratio (PER) is 14x.

Micron also saw a surge in performance driven by increased demand for AI memory. Revenue in the most recent quarter grew from $9.3 billion in the prior-year period to $41.5 billion. Gross profit margin increased from 37.7% to 84.6%. Adjusted earnings per share (EPS) jumped from $1.91 to $25.11. Micron generates approximately three-quarters of its revenue from DRAM and the remaining quarter from NAND.

The spread of AI is driving up demand for Micron's memory. High Bandwidth Memory (HBM) is integrated into GPUs, and large-capacity Solid State Drives (SSDs) are used for storing AI training data. SK Hynix expects the DRAM supply shortage to continue until at least 2030. Major companies, including Micron, have also begun signing long-term supply contracts lasting up to five years. Based on estimated earnings for FY2027, Micron's forward Price-to-Earnings Ratio is 6x.

Nasdaq's editorial analysis selected Nvidia as the investment target for the next five years. Micron was identified as having the burden of potentially higher earnings volatility depending on the memory semiconductor market conditions. Nvidia is maintaining its dominance in the AI training market while expanding its growth areas into inference and agentic AI. The analysis predicts that Nvidia will outperform Micron in the profitability competition over the next five years as well.

[Key Article Summary]

-Nvidia recorded revenue of $96.2 billion in Q2 FY2027, with data center revenue increasing by 117%.

-Micron's recent quarterly revenue increased from $9.3 billion to $41.5 billion, and adjusted EPS surged from $1.91 to $25.11.

-Nasdaq's editorial analysis predicted Nvidia's advantage in the 5-year investment competition, considering the volatility of the memory market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*