NVIDIA, Broadcom, NXP, and Analog Devices are Citi's top picks heading into earnings season.
Heading into earnings season, the semiconductor names Citi is watching most closely are NVIDIA ( NVDA )、Broadcom (AVGO ), NXP Semiconductors ( NXPI ), and Analog Devices ( It is ADI.
"We expect the earnings season for semiconductor companies to progress favorably, with market expectations rising for nearly all target companies," wrote analyst Atif Malik in a note to clients. "Driven by demand for AI and general-purpose servers, we see data center semiconductors as the most promising. Following that, we are also paying attention to analog semiconductors due to low inventory levels and declining profit margins. We remain cautious about PC/smartphone semiconductors, as rising component costs could negatively impact shipment volumes. Our top buy recommendations are AVGO, NVDA, ADI, and NXPI."
Furthermore, delving deeper, Mr. Malik mentioned OpenAI (OPENAI).) and Oracle (ORCLDigging deeper, Malik noted that amid recent declines in AI-related chip stocks due to concerns surrounding OpenAI and Oracle, Broadcom and NVIDIA are offering 'attractive entry points.' 'Fundamentally, demand for computing and networking for next-generation inference models is accelerating, which is likely to drive share price increases for AVGO and NVDA, companies we consider core to the AI space,' Malik added. 'NVIDIA discussed rising data center demand at CES, and TSMC last week raised its projections for revenue and capital expenditure growth in 2026.'
Furthermore, while Malik stated that a recovery in the analog market seems increasingly imminent, the duration of this recovery remains unclear. Therefore, he highlighted Analog Devices and NXP Semiconductors as the two most attractive companies in this sector, citing their respective valuations.
Finally, Mr. Malik mentioned Qualcomm (The stock price of QCOM is Apple (AAPLLastly, Malik predicted that Qualcomm’s stock would decline post-earnings release due to concerns over the loss of its modem business with Apple, while he forecasted NXP Semiconductors to rise.
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