Micron beats Broadcom as better AI stock pick

Broadcom and Micron sit at different points in the AI supply chain. Broadcom designs custom AI processors and networking components for hyperscalers, enterprises, and AI labs, while Micron makes compute and storage memory that feeds data to AI accelerators, including Broadcom's custom chips. Both are seeing phenomenal demand, but their recent trajectories differ.

Micron just reported fiscal 2026 fourth-quarter results for the three months ended Sept. 3, with revenue up 379% year over year to $54.23 billion and adjusted earnings up 11x to $33.42 per share. Management expects fiscal 2027 to be "even better," with memory and storage supply demand conditions much tighter in fiscal 2027 and 2028 than in 2026. Broadcom, meanwhile, has built a client base including Alphabet's Google, OpenAI, Anthropic, and Meta Platforms. Its AI revenue is on track to jump 186% to $58 billion in fiscal 2026, with targets of $115 billion in fiscal 2027 and $230 billion in fiscal 2028. The custom AI processor market is expected to grow 24% annually through 2035, according to Globe Market Research.

The article's verdict favors Micron because it trades at a significantly cheaper valuation and has a higher growth rate, though analysts expect Micron's earnings to drop in fiscal 2029. That forecast could change if strong memory demand and tightening supply conditions persist, which would support further upside. Broadcom remains a solid long-term investment given its custom AI processor position. The choice between the two hinges on whether investors prioritize Micron's cheaper valuation and higher growth over Broadcom's established role in custom AI chips.