Micron (MU) Threatens Nvidia (NVDA) with 84% Profit Margin...Who Will Win the Semiconductor Leader Race?

▲ Micron (MU), Nvidia (NVDA)/AI Generated Image

Micron Technology (MU) is aiming for the position of the next leader after NVIDIA (NVDA), backed by an explosion in demand for artificial intelligence (AI) memory.

According to Nasdaq on June 28 (local time), Nvidia has established itself as a leading company in the AI market, with its stock price surging more than 1,100% over the past three years. This is the result of its dominance across the entire AI system, expanding from Graphics Processing Units (GPUs) to networking equipment and enterprise software.

Micron has also emerged as a key beneficiary of the AI proliferation. The company supplies DRAM, NAND, HBM memory, and storage products necessary for AI operations. Nasdaq stated that as the use of AI agents increases, the demand for memory performance could grow even further.

The pace of performance improvement is already explosive. Micron's revenue in the most recent quarter more than quadrupled, exceeding $41 billion, and net income jumped from $1.8 billion in the same period last year to $28 billion. The company anticipates that the situation where demand outstrips supply will continue beyond this year.

Profitability is also attracting market attention. Micron's gross profit margin in the most recent quarter exceeded 84%, surpassing Nvidia's 74%. The fact that the AI boom is not just leading to revenue growth but also to improved profit margins is a key point that is increasing investor interest.

However, it is difficult to conclude that Micron will immediately achieve the same status as Nvidia. Nvidia is a leader in the AI chip market, while Micron is a company specializing in memory and storage devices. Nasdaq also pointed out SK Hynix (SK Hynix) being evaluated as a major player in the AI memory sector as a risk for Micron.

Nevertheless, the stock price is already following an Nvidia-like rally path. Micron's stock price has surged more than 800% over the past year. Nasdaq evaluated that Micron has room for further long-term growth based on recent demand and revenue growth trends.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*