Micron's reliance on $100 billion in contract-backed revenue and record margins offers a structural advantage over NVIDIA's circular financing model, despite NVIDIA's dominant market position.
Micron benefits from take-or-pay contracts, ~$22 billion in customer deposits, record 84.9% gross margin, and a structural cash-flow advantage over NVIDIA.
NVIDIA expects strong ~70% fiscal 2028 revenue growth but faces margin compression from higher memory costs and balance-sheet support for key AI customers.
While both NVIDIA and Micron capitalize on AI data center demand, their financial structures diverge significantly. Micron secures its outlook through $22 billion in customer deposits and take-or-pay contracts, whereas NVIDIA faces margin pressure from rising memory costs and balance-sheet support for its buyers. Micron currently leads in valuation and recent growth metrics, positioning it as a more stable play despite NVIDIA's longer track record of profitability.
Micron utilizes take-or-pay agreements and $22 billion in customer deposits to guarantee revenue, while NVIDIA provides balance-sheet support to its AI lab customers to facilitate chip adoption.
NVIDIA's gross margins are pressured by higher-than-expected memory costs, though management expects margins to stabilize between 72% and 73% in fiscal 2028.