Analog Devices (NASDAQ:ADI) has been named Citi’s new top pick in the U.S. semiconductor sector. The analysts moved Analog Devices to the top position due to its lower downside risk in the automotive sector compared to other analog semiconductor companies, especially after recently announcing earnings. Meanwhile, Broadcom and AMD continue to hold the second and third spots, with both remaining top picks for AI-related investments, though there are concerns about potential margin pressures in their AI segments.
Citi also upgraded Texas Instruments to fourth place, citing expectations of rising gross margins, despite concerns over the fourth-quarter 2024 guidance. Any potential share-price weakness is seen as a buying opportunity. Micron was downgraded to fifth, with Citi expecting lower consensus estimates in the near term, but the firm believes the ongoing DRAM inventory correction will end within a few quarters. Microchip remains in the last position among Citi’s Buy-rated semiconductor stocks, pending further catalysts for growth.