With the advent of artificial intelligence (AI), NVIDIA Corporation (NASDAQ:) has surged to become the world’s most valuable company, reaching a market capitalization of around $4.5 trillion, an extraordinary increase from roughly $0.5 billion at the time of its IPO.
NVIDIA’s shares surged an astonishing 427,191.5% since its inception, fueled by its graphics processing units (GPUs) becoming the backbone of AI training and data centers. More recently, the relentless demand for its chips, especially those built on its Blackwell architecture, has driven strong quarter-over-quarter growth in sales and profits.
However, over the past two years, surging enthusiasm around AI has fueled impressive gains for Micron Technology (NASDAQ:) and Palantir Technologies (NASDAQ:), which have climbed 405.9% and 412.6%, respectively, far outpacing NVIDIA’s 153%. Both companies boast a highly scalable business model and are viewed as one of the few capable of replicating NVIDIA’s success. Here are the reasons behind that view –
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1. HBM: AI-Driven Demand Fuels Micron’s Growth
Micron has grabbed Wall Street’s attention amid surging demand for its high-bandwidth memory (HBM) chips, driven by the rapid expansion in AI. With hyperscalers and data center operators increasing investments in AI infrastructure, the demand for HBM chips has climbed sharply. At the same time, supply constraints have created a demand-supply imbalance, enhancing Micron’s pricing power, lifting profit margins, and boosting its shares upward.
Micron CEO Sanjay Mehrotra acknowledged that sustained demand for HBM chips, despite a tight supply, should continue to support the company’s performance. Micron, thus, expects fiscal second-quarter 2026 revenues to come between $18.3 billion and $19.1 billion, higher than fiscal first-quarter 2026’s revenues of $13.64 billion, according to investors.micron.com.
Management also expects further growth in net income. Importantly, Micron supplies its HBM chips to customers beyond NVIDIA, including Advanced Micro Devices (NASDAQ:), which helps ensure steady demand even if NVIDIA’s competitive advantage diminishes. Micron’s expected earnings growth rate for the current year is 300.7%.
2. Palantir: Momentum With AI Platform Driving Growth
Palantir is gaining momentum due to its strong competitive edge. Its platforms, such as Gotham and Foundry, face the least competition, providing predictable cash flows for the future. Most importantly, Palantir’s Artificial Intelligence Platform (“AIP”) has gained immense popularity as it can easily fit in and deploy AI and large language models within complex data systems.
Demand for AIP has been robust among both U.S. commercial clients and government agencies. The growing adoption of AIP helped Palantir’s U.S. commercial segment revenues jump 137% year over year and 28% sequentially to $507 million in the fourth quarter of 2025, according to investors.palantir.com. Government revenues in the said period reached $570 million, up 66% year over year and 17% quarter over quarter.
Looking ahead, Palantir expects full-year 2026 revenues to more than double to $7.182-$7.198 billion from $3.320 billion in 2025. This revenue growth seems achievable, as the U.S. commercial clients’ remaining deal value hit $4.38 billion in the fourth quarter of 2025, up 145% year over year and 21% quarter over quarter. The outlook is further supported by a Rule of 40 score of 127%, well above the 40% threshold, indicating a highly scalable business model. Micron’s projected earnings growth rate for the current fiscal year stands at 78.7%.
Palantir currently has a Zacks Rank #2 (Buy), and Micron has a Zacks Rank #1 (Strong Buy).
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This article originally published on Zacks Investment Research (zacks.com).
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