NVIDIA (Nasdaq: NVDA) and Micron Technologies (NYSE: MU) have a lot in common, because both are chip designers whose fortunes rise and fall with the larger market for gadgets and computers. But where Micron truly focuses on the nuts and bolts of the machine with its memory chips, NVIDIA's graphics products aim for a value-add piece of the market. So which stock makes for a better investment today? Let's find out.

Round 1: Balance sheet
Micron has $2.3 billion of cash equivalents handy (and rising), but also sits on $1.7 billion of long-term debt. NVIDIA's bank accounts show $1.8 billion of nearly debt-free cash. Neither company is in trouble, liquidity-wise, but NVIDIA is better equipped for another downturn or for making a large acquisition. This round goes to NVIDIA.

Round 2: Operations
Micron is celebrating the end of a long price war in grand style, pumping out cash and profits with enviable margins. The memory industry has settled down into a sustainable pattern of balancing manufacturing capacity against product demand. In the green corner, Advanced Micro Devices (NYSE: AMD) and Intel (Nasdaq: INTC) are making life hard for NVIDIA at the high and low ends of the graphics market, respectively, and the company isn't helping things with a slew of design problems and manufacturing issues. NVIDIA wasn't even profitable last quarter. This round goes to Micron.

Round 3: Long-term safety
Memory chips constitute a commodity market where a reliable supply of industry-standard products is more important than inventing the next killer chip. That's exactly the opposite of the situation NVIDIA faces. Working in a much more mature segment makes Micron the grown-up choice, so Micron takes this round.

Round 4: Short-term sex appeal
For much the same reasons, NVIDIA runs away with the sex-bomb award. This market is always just one fantastic product away from turning on its head, and NVIDIA could very well be due some good luck in the next year or two.

Round 5: CAPS rating
This one is easy to call: Micron currently gets a good-but-not-good-enough four-star rating from our CAPS community while NVIDIA scores five out of five. This round goes to NVIDIA in a landslide.

Recap:

Round

Micron

NVIDIA

Balance sheet

 

X

Operations

X

 

Long-term safety

X

 

Short-term sex appeal

 

X

CAPS rating

 

X

NVIDIA beats Micron based on a stronger financial foundation and lots of love from the peanut gallery. Is this a fair outcome, or should Micron really win because of its stronger recent execution? Vote in our Motley Poll, and then keep the discussion going in the comments below.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Intel is a Motley Fool Inside Value recommendation. NVIDIA is a Stock Advisor pick. The Fool owns shares of and has written puts on Intel. Motley Fool Options has recommended buying calls on Intel. Try any of our Foolish newsletter services free for 30 days.

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