--- title: "Micron or AMD: One AI Chip Stock Is Worth Buying, the Other Overvalued, Says Investor" type: "News" locale: "en" url: "https://longbridge.com/en/news/294586537.md" description: "Investor Prakhar Agarwal rates Micron as a Buy and AMD as a Sell. He views Micron's recent 32% drop as sentiment-driven, creating an attractive entry point for gradual accumulation. Conversely, he considers AMD overvalued due to supply chain dependencies, customer concentration, and execution risks priced into its high valuation, limiting long-term return potential despite strong momentum." datetime: "2026-08-01T15:34:58.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294586537.md) - [en](https://longbridge.com/en/news/294586537.md) - [zh-HK](https://longbridge.com/zh-HK/news/294586537.md) --- # Micron or AMD: One AI Chip Stock Is Worth Buying, the Other Overvalued, Says Investor **Micron (NASDAQ:MU)** and **Advanced Micro Devices (NASDAQ:AMD)** have been two of this year's biggest AI-chip winners, but neither stock escaped the semiconductor sell-off that swept through the market in July. Micron has fallen about 32% from its late-June peak, although it remains up 188% this year. AMD has retreated about 18% from its June high, while holding on to a year-to-date gain of 122%. ### Claim 55% Off TipRanks - Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions - Subscribe to TipRanks Smart Investor Newsletter, and discover new investing opportunities with data-backed stock picks The iShares Semiconductor ETF ended July down 22%, its worst monthly performance since December 2002, as concerns surrounding AI infrastructure spending, stretched valuations, Chinese competition, and higher interest rates weighed on the sector. At the same time, many chipmakers continue reporting healthy demand, raising the question of whether the recent correction has become disconnected from underlying business fundamentals. According to investor Prakhar Agarwal, the answer depends largely on which company investors are considering. Looking first at Micron, Agarwal argues the recent sell-off reflects investor sentiment far more than any deterioration in the company's underlying business. While the investor continues to view the memory industry as cyclical, he believes the market has become overly pessimistic after a pullback that was not accompanied by weakening customer agreements, softer hyperscaler spending, or deteriorating fundamentals. "I would still hesitate to suggest a buy had the price decline been driven by factors directly affecting the company's operations," the investor explained. "However, the share price depreciation appears to have been driven largely by market sentiment." Although Agarwal stops short of describing Micron as a permanent buy-and-hold investment, the investor believes the current valuation deserves consideration. "Micron has reached price levels that could warrant closer attention from investors who were previously interested in building an allocation but did not have an attractive entry point," he wrote. Rather than committing all available capital immediately, Agarwal prefers a gradual approach that leaves room for additional purchases if broader market weakness continues. "The appropriate way to play this could be to initially allocate a prudent amount of capital to the position," the investor noted, adding that further market-driven declines could create opportunities to average into the investment. He also believes investors may benefit from rich option premiums through covered-call strategies while waiting for sentiment to improve. Meanwhile, AMD receives a far more cautious assessment from Agarwal despite the company's impressive operating momentum. The investor argues that AMD remains heavily dependent on outside suppliers for advanced packaging, wafers, and high-bandwidth memory while also facing growing competition from custom AI chips developed internally by the largest cloud providers. Those considerations leave very little room for execution mistakes at today's valuation, according to Agarwal. "The investment case remains contingent on continued data center expansion, with flawless execution already priced in by the market and little, if any, margin of safety at current levels," the investor opined. Agarwal also warns that investors are overlooking how concentrated AMD's business model has become. "The common thread across all these risks is concentration," Agarwal argued, referring to its dependence on a handful of customers, a limited manufacturing base, concentrated revenue sources, and a valuation that depends heavily on continued AI spending. Agarwal ultimately believes the current valuation limits long-term return potential despite AMD's attractive business. "The risks are elevated, while the returns, even if expectations are met, remain largely limited over the long-term given the stock's already elevated valuation," he summed up. All in all, Agarwal assigns Micron a Buy rating, viewing the recent decline as an attractive opportunity, while AMD receives a Sell rating. (To watch Agarwal's track record, click here) Wall Street takes a less binary view, remaining bullish on both stocks. Micron earns a Strong Buy consensus rating, while its average price target of $1,569.29 implies about 91% upside over the next 12 months. AMD also sports a Strong Buy consensus rating, although its average price target of $582.65 points to a more modest gain of nearly 22%. 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