Harsh Chauhan, The Motley Fool
4 min read
Aug. 26 is going to be a big day for the stock market. Nvidia (NASDAQ: NVDA), the world’s largest company by market cap, will release its fiscal 2027 second-quarter results on that date.
Nvidia’s results can be considered as a barometer of the state of artificial intelligence (AI) technology, which has played a central role in boosting the stock market in recent years. A solid set of numbers and guidance from Nvidia will boost investor confidence not just in this AI stock but in the overall AI infrastructure ecosystem.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
That’s why I believe that Micron Technology (NASDAQ: MU), one of Nvidia’s key suppliers, could witness a parabolic jump in its stock price after Aug. 26. Let’s look at the reasons why that may be the case.
Nvidia’s next-generation AI chips will give Micron’s prospects a big boost
Micron makes high-bandwidth memory (HBM) for Nvidia. These dedicated AI memory chips are deployed in chip systems to quickly transport massive data sets to graphics cards and other AI accelerators.
Micron announced earlier this year that it has started the high-volume production of HBM chips for Nvidia’s upcoming Vera Rubin processors. Also, Nvidia confirmed in May that it has ramped up Vera Rubin into full production. It is worth noting that the max HBM capacity of the Vera Rubin R100 graphics processing unit (GPU) is poised to jump to 288 gigabytes (GB) from the Blackwell B200’s 192 GB.
Also, the Vera Rubin chips use a newer version of HBM, which reportedly costs 80% more than the previous generation, according to semiconductor industry tracker Silicon Analysts. So, Micron seems well-positioned to see a jump in both revenue and margins, driven by higher memory volumes and improved pricing for memory chips it makes for Vera Rubin processors.
Moreover, Nvidia has a massive order pipeline of $1 trillion for Vera Rubin and Blackwell processors in 2026 and 2027. As a result, the chip giant is capable of delivering stronger-than-expected growth and guidance on Aug. 26, which could lift Micron stock considerably given the tight relationship between the two companies.
Micron’s valuation suggests that the stock could jump substantially
Trading at just 6 times forward earnings, Micron is a no-brainer buy right now, given that its earnings are expected to grow at a terrific pace over the long run.
