Micron’s AI Advantage: Poised to Outperform Alphabet

Artificial intelligence (AI) has develop into a major catalyst for growth across the tech sector, significantly benefiting companies like Alphabet. Still, Micron Technology is increasingly positioned to reap even greater rewards from the AI boom and potentially outperform the tech giant this year, driven by its critical role in providing the memory chips essential for AI data centers.

Alphabet’s AI Momentum

Alphabet has made substantial gains in the AI race, particularly with its chatbot, Google Gemini, which now boasts over 750 million monthly active users – an 88% increase in just nine months. Revenue from products built on its generative AI models grew nearly 400% year-over-year in the fourth quarter of 2025. A recent collaboration with Apple, where Apple will reportedly pay Alphabet $1 billion annually to utilize Gemini as the foundation for the next iteration of Siri, further solidifies Alphabet’s AI position.

Alphabet’s success in AI largely stems from its Google Cloud services, which experienced a 48% increase in sales in the fourth quarter, reaching $17.7 billion.

Micron: The Indispensable Monopoly

Despite Alphabet’s strong performance, Micron Technology has been exceeding its growth, and this trend is expected to continue. Micron manufactures the memory chips that are a critical component of AI data centers, and demand is currently exceeding supply. Sumit Sadana, Micron’s Chief Business Officer, stated the company is “sold out” of memory for 2026, even before major tech companies like Microsoft, Meta Platforms, Alphabet, and Amazon announced plans to increase capital expenditure on data center infrastructure – potentially reaching $650 billion this year.

To address this surging demand, Micron is investing $200 billion in building new manufacturing facilities across the U.S., with these facilities expected to reach online over the next several years.

Micron’s sales surged 56% to $13.6 billion in the first quarter of fiscal 2026, with non-GAAP earnings increasing 167% to $4.78 per share. Analysts predict Micron’s sales will more than double from 2025, reaching $97.6 billion in 2027.

Investor Confidence

Billionaire investor David Tepper of Appaloosa Management has significantly increased his stake in Micron Technology, boosting his holdings by 200% in February 2026. This move, along with increased positions in Alphabet and Meta, signals a strong belief in the potential of AI infrastructure.

Looking Ahead

As major tech companies compete for dominance in AI, the demand for memory will continue to rise, positioning Micron to benefit significantly. This dynamic suggests Micron’s stock has the potential to outperform Alphabet shares in the coming year.