Nvidia (NVDA -0.88%) is the world's most valuable publicly traded company, but it may not hold that title in a few years. Memory chip maker Micron (MU -2.13%) has a real shot at taking the crown. Fundamentals and growth rates are on Micron's side as both companies continue to outperform the S&P 500.
Micron may soon generate more revenue per quarter than Nvidia
The recent memory chip boom has closed the gap between Micron and Nvidia. Looking at what both companies did last year and then comparing it to their most recent earnings releases will paint the picture.
Micron's fiscal 2025 fourth quarter featured $11.3 billion in revenue, while Nvidia earned $46.7 billion in its fiscal 2026 second quarter. Nvidia brought in more than 4 times Micron's revenue during that time.
Now, let's fast-forward a year to the present day. Micron's fiscal 2026 fourth-quarter results revealed $54.2 billion in revenue, while Nvidia's fiscal 2027 second-quarter sales were $96.2 billion. A more than 4x difference in Nvidia's favor shrank to a 1.8x difference in one year.
Image source: Getty Images.
Guidance also favors Micron, with the memory chip maker projecting 13.4% sequential growth at the midpoint. Nvidia's midpoint implies $108 billion in revenue, which would be a 12.2% sequential jump. Both companies beat guidance in their most recent earnings results, but Micron is growing faster. Furthermore, they both have sky-high net profit margins, with Micron's edging out Nvidia's in the most recent quarter.
Micron is trading at a steep discount
Micron and Nvidia both trade at lower valuations than the S&P 500, but the gap between Micron and Nvidia is tremendous. While Micron trades at a forward P/E ratio of 7, Nvidia is valued at a much higher 23. Micron would have to more than triple in price to reach Nvidia's valuation, which would put the stock close to a $4 trillion market cap.
That discount will become more striking if Micron continues to outpace Nvidia with year-over-year and sequential revenue growth. Continued memory chip shortages fuel the likelihood of that scenario.
While investors can't expect Micron to deliver 379% year-over-year revenue growth forever, its eventual deceleration may be slow. Nvidia has already demonstrated that a tech giant at the center of the AI trade can still double its revenue year over year.
NASDAQ: MU
Key Data Points
Multiyear strategic customer agreements minimize the risk of cyclical decline
One of the bearish concerns surrounding Micron is that it is a cyclical business. Memory chip sales surge, chipmakers produce more of them, and then a slowdown in chip sales results in massive inventory gluts.
Micron is already experiencing hypergrowth in its sales, but bears have worried about an eventual slowdown that could force Micron to cut prices, incur steep year-over-year revenue declines, and wind up with narrow margins.
However, the AI trade is different. Tech executives and political leaders have described it as the Fourth Great Industrial Revolution. The demand for agentic AI alone will keep Micron busy for multiple years, and physical AI will also require more memory chips.
These tailwinds also lift Nvidia, but based on past results, Micron has benefited even more than the largest AI chipmaker. As Micron continues to deliver impressive growth rates, this bearish concern will increasingly find itself in the rearview mirror, and that can help Micron command a similar valuation to Nvidia.
Right now, Micron trades at a $1.2 trillion market cap, and Nvidia has a $5.8 trillion market cap. The gap is wide now, but as Micron has been catching up in total revenue, Nvidia's market cap lead may shrink quickly as well.
