Billionaires Sold Nvidia for Micron—Analyst Disagrees
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- Israel Englander and David Tepper sold Nvidia and bought Micron Technology in the fourth quarter; their hedge funds beat the S&P 500 by more than 30 percentage points over the last three years.
- Since the fourth quarter ended in December, Micron shares have added 50% while Nvidia shares have fallen 3%, yet Wall Street now views Nvidia as the more attractive stock, with 69 analysts setting a median target of $265 (47% upside) versus Micron's $450 (6% upside) from 49 analysts.
- Nvidia holds more than 80% market share in AI accelerators and posted Q4 fiscal 2026 revenue of $68 billion, up 73%, with non-GAAP earnings up 82% to $1.62 per diluted share; Morningstar's Brian Colello credits a 'wide economic moat' spanning GPUs, software, and networking.
- Micron Technology saw Q1 revenue climb 56% to $13.6 billion and non-GAAP net income soar 167% to $4.78 per diluted share, but the gains were largely driven by supply-constrained pricing on commoditized memory chips rather than a durable competitive moat.
- Micron is the third-largest DRAM and NAND supplier, gaining share in all three memory categories over the past year while industry leader Samsung lost share, though Morningstar's William Kerwin says the share gains stem from a temporary supply shortage that could flip to a glut.
- Both stocks trade at 38 times adjusted earnings, but Wall Street expects Nvidia adjusted earnings to grow 39% annually through fiscal 2029 versus just 17% for Micron, with Micron's bottom line projected to fall sharply after fiscal 2027.
Why it matters: Two of the most successful hedge fund managers of the past three years made a contrarian rotation out of an 80%-market-share AI infrastructure leader into a third-place memory supplier whose growth depends on temporary supply tightness — a move retail investors may be tempted to copy right as Micron's upside narrows to 6% and Nvidia's sits at 47%.
