Micron vs. Intel: Which AI Stock Is the Better Buy?

Micron Technology (NASDAQ: MU) and Intel (NASDAQ: INTC) have been some of the top-performing stocks of the year. Both stocks are up by more than 200% year to date as AI tailwinds extend their rallies. Micron specializes in memory chips, while Intel's AI products have excited investors.

Here's what investors should know when comparing both stocks.

Image source: Getty Images.

Intel's CPUs, Foundry, and AI chips are gaining momentum

Intel offers application-specific integrated circuits (ASICs) that have been gaining momentum and are a cheaper alternative to Nvidia's graphics processing units (GPUs), but its CPUs are at the center of its AI rally. CPUs, or central processing units, act as the brains of GPUs, and AI agents are making them more valuable.

Agentic AI is more complex than large language models. Right now, an AI data center requires approximately 1 CPU per 8 GPUs. Thanks to AI agents, those same data centers will need 1 CPU for every 1-2 GPUs.

AI data centers aren't going to get rid of their Nvidia chips, so they will have to buy more CPUs like the one Intel offers. This simple math problem indicates that CPU sales will surge.

Intel has already seen this demand translate into revenue growth. Although the company posted 7% year-over-year revenue growth across its business, Intel's Data Center and AI segment was up 22% year over year. It made up more than one-third of Intel's total revenue.

AI data center investments should ramp up in the years ahead, and as the U.S. government looks for ways to expand the industry, Intel will be one of the first companies it thinks of. That's because the Trump administration invested $8.9 billion in Intel last year, resulting in a 10% stake in the company.

The investment produced a substantial return for the Trump administration, and the administration is financially incentivized to prioritize Intel for AI opportunities. The administration has been helping Intel partner with fellow tech giants as Trump pushes them to use Intel Foundry factories to produce their chips domestically. Those partnerships have contributed to 16% year-over-year revenue growth for Intel Foundry in Q1.

Micron's memory chips continue to experience parabolic demand

Micron's memory chips enable AI chips to operate efficiently and retain the information they create and process. These memory chips also enable AI chips to instantly access stored information.

While some investors were nervous about memory chips entering a downward cycle, Micron silenced critics by quadrupling its revenue year over year in the third quarter of fiscal 2026. Net income more than doubled sequentially and was up by more than tenfold year-over-year.

This parabolic growth resembles Nvidia's growth numbers a few years ago. While Nvidia is still delivering tremendous financial results, Micron is currently in a league of its own. Its guidance for the fourth quarter of fiscal 2026 suggests more growth is on the way. The projected $50 billion in revenue represents more than 20% sequential growth from the $41.86 billion in fiscal 2026 third-quarter sales.

Critically, Micron also announced multiyear strategic customer agreements that offer more revenue visibility. These deals also insulate Micron from the cyclical nature of the business, but with AI still in its early innings, the market opportunity is likely to expand for multiple years. Micron is at the center of it with its high-bandwidth memory chips.

The final verdict

Micron comes out on top because it is currently achieving substantial revenue and net income growth, while Intel can do so in the future. It's hard to find a company that can quadruple sales year over year while trading at a 7.4 forward P/E ratio. That's a lower P/E ratio than most banks despite Micron delivering higher growth rates than Nvidia.

Intel trades at a P/E ratio of 147 and has produced only 7% year-over-year revenue growth. Key AI segments delivered double-digit growth, and a strong relationship with the Trump administration can open the door to more tech partnerships and revenue growth.

Intel is building stronger fundamentals and positioning itself for meaningful market-share expansion, while Micron has already reached that stage and still trades at a lower valuation.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.