Micron (MU) or Microsoft (MSFT): Which Beaten-Down AI Stock Is the Better Buy Right Now?

Tech stocks have faced heavy selling pressure recently, and investors are hunting for bargains in the AI sector. Micron (MU) and Microsoft (MSFT) have both pulled back, but their growth potential differs. MSFT has fallen 25% from its recent high of $481.60, while MU is down over 20% from its recent high of $461.70. Using TipRanks’ Stocks Comparison tool, we compare MU and MSFT side by side to see which beaten-down AI stock may offer the better opportunity. Both stocks carry a Strong Buy rating from analysts, but MSFT shows a higher upside of over 60%, while MU offers about 50% upside.

For context, Microsoft develops software, cloud services, and AI solutions, including Windows, Office, Azure, and AI tools like Copilot, serving businesses and consumers worldwide. Meanwhile, Micron is a leader in DRAM, flash memory, and high-bandwidth memory (HBM) for computers, smartphones, SSDs, and AI servers.

MU or MSFT: Which Is Better Valued Now?

The recent selloff has pushed Microsoft to valuation levels not seen in years, with its forward P/E ratio at 21.57, below the sector average of 29.0. Many analysts believe the current discount is too deep, given Microsoft’s strong fundamentals and solid growth. In Q2 FY26, revenue rose 17% year-over-year, and Wall Street expects roughly 16% growth for the next quarter and the full year.

Micron, meanwhile, trades at a forward P/E of 6.17, much below the sector average of 28.01, indicating significant upside if growth continues. For Q2 FY26, Micron reported $23.9 billion in revenue and $12.20 EPS, well above consensus estimates. Looking ahead, the company expects $33.5 billion in sales and $19.15 EPS for the May quarter, which would represent 42% and 70% above estimates, respectively.

Wall Street’s take on MU Stock

Wall Street analysts maintain a Strong Buy consensus rating on MU stock, with 26 Buy ratings and two Holds assigned over the past three months. The average price target among analysts is $536.55.

Notably, Cantor Fitzgerald’s top-rated analyst C J Muse has the Street-high price target of $700 on MU stock, implying an upside of 96%. Muse highlighted Micron’s strong guidance for the May quarter EPS of $19.15, well above the consensus of $12.03. The upside is driven by robust pricing across DRAM and NAND, with AI now consuming 50% of total DRAM bits, tight NAND supply, and KVCache technology further supporting margins.

Most recently, Morgan Stanley’s Joseph Moore expressed his bullish take on MU stock, viewing the recent pullback as a buying opportunity. He believes that memory demand is stronger and more durable than the market expects, and that limited supply will remain a key bottleneck supporting AI-driven growth. Moore expects Micron to generate annual cash flow equal to 15%-25% of its current market cap, noting that “while it won’t last forever, it should continue long enough for the stocks to move materially higher.” Moore has a Buy rating on MU with a price target of $520.

Wall Street’s Take on MSFT Stock

MSFT stock has 33 Buy ratings and three Holds assigned over the past three months. The average price target among analysts is $583.68.

Among the bulls, Citi’s analyst Tyler Radke reiterated his Buy rating on MSFT at a price target of $635, predicting an upside of over 70%. Radke highlighted strong momentum in Microsoft’s AI offerings and ongoing growth in its cloud business. He noted that Copilot is becoming a key growth driver for the company’s commercial software segment, with adoption accelerating rapidly and potentially outpacing past growth trends.

Meanwhile, earlier this week, Bank of America analyst Tal Liani, a five-star-rated analyst, reaffirmed a Buy rating on MSFT with a $500 price target, implying roughly 35% upside. Liani believes Microsoft is at the center of the AI boom and well-positioned to benefit from AI monetization across its cloud and software businesses.

Conclusion

Both Microsoft and Micron are trading at discounted valuations after recent selloffs, offering potential buying opportunities for investors. MSFT provides strong fundamentals and steady growth with a reasonable discount, while MU shows upside potential thanks to its low P/E, robust revenue, and impressive earnings guidance.