Is Micron Being Squeezed Out Now That SK Hynix and Samsung Have Partnered With Major Chip Companies?

On the surface, it might look like competitors may have frozen out Micron Technology (NASDAQ: MU). This comes as SK Hynix and Nvidia have partnered to build chips compatible with one another, and now Samsung Electronics and Broadcom are collaborating as well. Amid those developments, Micron stock is down by more than 30% from its high in late June.

According to Micron, the memory chip supply will remain tight beyond 2027. Nonetheless, thanks in part to these competitor agreements, one might conclude that Micron faces a future where the industry plans to leave it behind.

Fortunately, Micron has plenty of other options, and the company should continue prospering for these reasons.

Image source: The Motley Fool.

Micron's remaining book of business

One reason Micron is likely to be fine is that it continues to partner with Nvidia. Micron failed Nvidia's specification requirements for data transfer speed in its Vera Rubin architecture, according to industry sources. That led to Micron not supporting that architecture.

However, Nvidia CEO Jensen Huang confirmed that the three top memory chipmakers, which included Micron, were indispensable to Nvidia's AI hardware. Thus, it has not completely lost Nvidia as a client.

Moreover, the comparative lack of reliance on Nvidia has given it a more diverse client base. As a result, it has earned business from cloud providers and custom AI chip designers. This means that companies such as Meta Platforms, Advanced Micro Devices, and Tesla have become Micron customers.

Additionally, it has locked many of these customers into five-year agreements. That places Micron in a position to better endure any possible downturn that sent its stock tumbling after past upcycles.

The rapid growth continues, but watch the stock

Furthermore, investors concerned about Micron should review its financials. In the third quarter of its fiscal 2026 (ended May 28), its revenue totaled $41 billion -- up 346% year over year. With that gain, its $28 billion in profit far exceeded the $1.9 billion in net income from the year-ago quarter.

That is faster than the 247% increase forecast for the current fiscal year and the 84% rise in revenue predicted for fiscal 2027. Nonetheless, such numbers strongly indicate it remains a major competitor in the memory industry.

The stock has dropped in recent weeks. Investors have become skittish about the sustainability of the massive capital expenditures and financing concerns within the AI industry. Such price action means investors should probably buy through dollar-cost averaging (DCA) if they begin investing now.

Still, Micron stock sells at a P/E ratio of 19, possibly because its past volatility could make some investors nervous. Also, the forward P/E of 11 indicates its growth is on track to continue, yet another sign it will fare well despite not gaining specific partnerships.

Micron stock moving forward

Given industry growth and Micron's current customers, the stock could still grow even after losing out on agreements with Nvidia and Broadcom. Part of its continued success stems from its status as one of Nvidia's customers. Moreover, it maintains strong ties to the cloud industry and developers of custom AI chips.

That has led to massive revenue and profit growth. With its P/E ratio of 19, the semiconductor stock's rise is probably not over, but recent price action probably calls for a more cautious approach to Micron in the near term.

Will Healy has positions in Advanced Micro Devices. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Meta Platforms, Micron Technology, Nvidia, and Tesla. The Motley Fool has a disclosure policy.