Advanced Micro Devices (AMD) has surged 56% in the past month, becoming the best-performing S&P 500 stock. Investor confidence in AMD’s AI market role has grown due to recent partnerships with IBM, OpenAI, and Oracle. AMD’s GPU and CPU technologies position it well to capitalize on the AI and cloud infrastructure boom.

While AMD’s stock is soaring, concerns about its elevated valuation have emerged. Micron Technology (MU) offers better value, with its shares up 177% year-to-date compared to AMD’s 113%. Micron’s lower valuation and strong earnings growth potential make it a more attractive entry point for investors looking for semiconductor exposure.

AMD’s forward P/E ratio is now around 81.1 times earnings, signaling high growth expectations. Analysts predict a 68.2% rise in earnings in 2026, but with the premium valuation, there’s little room for error. Micron, on the other hand, trades at just 14.5 times forward earnings and is projected to see a 101.5% jump in EPS in fiscal 2026, making it undervalued.

Both AMD and Micron are poised to benefit from AI-driven demand in semiconductors. Wall Street analysts are optimistic about both stocks, but Micron, with its lower valuation and strong growth prospects, appears to offer a more compelling investment opportunity. Micron’s growth is driven by its HBM business and expanding customer base, making it an attractive semiconductor play.

Read more at Yahoo Finance: This AI Stock Is Cheaper Than AMD and Crushing It in Returns