Comparison of AMD and Micron in chip market, with Micron potentially being the better buy.

From Nasdaq: 2024-07-06 05:10:00

Advanced Micro Devices (NASDAQ: AMD) and Micron Technologies (NASDAQ: MU) are key players in the chip market, with AMD focusing on CPUs and GPUs while Micron specializes in DRAM and NAND chips. AMD outsources to Taiwan Semiconductor for efficient production, while Micron operates its own foundries for denser memory chips.

Both companies have shown growth and resilience, with AMD’s stock soaring 3,770% over the past decade and Micron’s rallying over 300%. AMD’s revenue mix includes a strong presence in the data center market, while Micron is benefitting from stabilization in markets like PCs and smartphones.

In 2023, AMD faced headwinds as sales of PC and gaming chips declined, while Micron struggled with plummeting revenue and negative margins. However, both companies are expected to rebound in 2024 and 2025 with growth projections for revenue and earnings.

Investors are weighing the value of investing in AMD compared to Micron, with AMD trading at a higher forward earnings multiple due to high expectations for its Instinct GPUs. Micron, on the other hand, is seen as a more reasonably valued option with a clearer path to cyclical recovery.

Considering the growth potential and valuations of both companies, Micron may be the better buy at this time. Analysts expect Micron’s revenue to grow significantly in 2025, making it an attractive option compared to AMD’s higher valuation and exposure to the PC and gaming console markets.



Read more at Nasdaq: Better Chip Stock: AMD vs. Micron