Broadcom Vs. Micron: Why They’re So Strong as Capital Shifts to Inference and Agentic AI

Alex Sirois

Tue, August 25, 2026 at 4:50 PM GMT+3 3 min read

Quick Read

Broadcom's AI orders exceeded $30B this quarter while Micron secured ~$100B in contracted memory revenue through five-year take-or-pay deals.
Micron's HBM4 is ramping twice as fast as its predecessor, with DRAM prices jumping 60% sequentially and gross margins hitting a record 84.9%.
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Broadcom (NASDAQ:AVGO) and Micron Technology (NASDAQ:MU) delivered blockbuster quarters mapping onto the shift from AI training to inference and agentic workloads. Broadcom sells custom accelerators and networking silicon that stitch hyperscaler clusters together. Micron supplies the high-bandwidth memory those clusters need. Two different business models. One shared tailwind.

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Custom Silicon Booms, Memory Prices Explode

Broadcom's fiscal Q2 revenue hit $22.2 billion, up 48% year-on-year, with AI semiconductor revenue of $10.8 billion, up 143%. Hock Tan told investors "networking represented almost 40% of our Q2 AI revenue" and guided Q3 AI silicon to $16 billion, up over 200% year-on-year. Bookings were the headline: AI semiconductor orders exceeded $30 billion in the quarter, with programs now stretching to Google TPUs, Meta MTIA XPUs, OpenAI silicon, and Anthropic compute capacity.

Micron's fiscal Q3 revenue reached $41.5 billion with a consolidated gross margin of 84.9% and non-GAAP EPS of $25.11. Sanjay Mehrotra said HBM4 12-high is ramping "twice as fast as HBM3E 12-high" after shipping over $1 billion in HBM4 revenue. DRAM prices rose in the low 60s percentage range sequentially. Memory finally got its scarcity moment.

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Business Driver

Broadcom

Micron

Growth Engine

Custom XPUs and Ethernet fabric

HBM4 and cloud DRAM

Capital Model

Fabless, asset-light

$27 billion FY26 capex

Customer Lock-in

Six frontier-model buyers

16 take-or-pay SCAs

Designer vs. Manufacturer

Broadcom stays chip-focused and leans on VMware for a software flywheel. Tan reiterated that fiscal 2027 AI silicon revenue will be "in excess of $100 billion" and visibility now extends to 2028. Micron locked customers into five-year take-or-pay agreements with floor prices Mehrotra says produce margins "well above our peak quarterly margins in any past cycle". Roughly $100 billion of contracted revenue and $22 billion in cash deposits and letters of credit are meant to smooth memory's cyclicality.

Inference Demand Will Test Both Models

The next catalyst for Broadcom is execution on 10 gigawatts of fiscal 2027 shipments, plus early Meta MTIA deliveries. For Micron, the tell will be Q4 guidance of $50 billion in revenue and roughly 86% gross margin, alongside HBM4E qualification. Watch whether Broadcom's networking mix holds near 40% of AI revenue as custom accelerator dollars scale, and whether Micron's SCAs hold if DRAM spot prices soften into 2028.

Why Split the Wallet Between These Two

Broadcom trades at a forward P/E of 20x with a 22.92% one-year gain, and throws off $10.3 billion of quarterly free cash flow. That is the compounder for stability. Micron, up 674.9% over the past year at a forward P/E of 6x, is the higher-variance bet on memory scarcity. Broadcom offers durability. Micron offers asymmetric upside from the inference buildout for those who can stomach a cyclical reversal. The picks-and-shovels story extends beyond the silicon too, and we rounded up seven power, cooling, and networking suppliers riding the same buildout in a free report here.