Is Micron the New Nvidia?

For the past 3 years, discussions astir artificial quality (AI) chips person chiefly revolved astir Nvidia (NASDAQ: NVDA). Nvidia's Hopper, Blackwell, and upcoming Rubin graphics processing portion (GPU) architectures service arsenic a halfway hardware instauration connected which generative AI applications are designed.

But implicit the past respective months, different semiconductor banal has travel into focus. Let's excavation into wherefore Wall Street's caller favourite AI spot banal is Micron Technology (NASDAQ: MU), and research wherefore the institution could beryllium pursuing successful Nvidia's footsteps.

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There are respective layers to the AI spot worth chain. GPUs from Nvidia and Advanced Micro Devices are general-purpose, versatile pieces of hardware. They are susceptible of processing ample datasets astatine precocious speeds, making AI exertion improvement much efficient.

On the different hand, Broadcom specializes successful customized application-specific integrated circuits (ASICs). Custom silicon is presently leveraged by hyperscalers specified arsenic Alphabet and Meta Platforms for circumstantial workloads crossed heavy learning oregon specialized inference needs.

According to Bloomberg Intelligence, the full addressable marketplace (TAM) for AI accelerators is expected to turn astatine a 16% compound yearly maturation complaint (CAGR) done 2033, reaching a size of $604 billion. These trends service arsenic a almighty secular tailwind for Micron.

As AI workloads standard and go much complex, an adjacent pouch of the spot realm that expands alongside GPUs and ASICs is representation and storage. Micron is simply a ascendant subordinate successful high-bandwidth representation (HBM), dynamic random entree representation (DRAM), and NAND chips.

In 2025, Micron's TAM was estimated to beryllium conscionable $35 billion. However, the company's absorption is forecasting the representation marketplace to turn to $100 cardinal by 2028.

The subtle takeaway present is that request for representation chips is accelerating astatine a overmuch faster gait than the GPU marketplace -- suggesting that Micron's spot solutions are poised for explosive maturation successful the coming years.

The superior crushed representation and retention chips person go truthful costly is owed to rising superior expenditure (capex) budgets from the hyperscalers. Just this twelvemonth alone, large tech is expected to walk much than $500 cardinal connected AI infrastructure.

These spending patterns person fueled monolithic shortages successful HBM solutions specifically. Industry probe from TrendForce suggests that prices for DRAM and NAND chips could soar by arsenic overmuch arsenic 60% and 38%, respectively, successful the archetypal 4th alone.