Due to the continuous increase in demand for AI chips, Citigroup holds a highly optimistic attitude towards the semiconductor industry
Citibank holds a highly optimistic view on the semiconductor industry, believing that artificial intelligence continues to lead the development trend of the semiconductor industry. The demand for AI chips from government agencies, academic institutions, and businesses of all sizes is continuously increasing, and the market potential is rapidly expanding. Citibank analysts predict that after Broadcom releases its financial report in June, the growth momentum in the AI field will be even stronger. In the simulation field, the prospects of Micron Technology and AMD are also promising. Citibank remains highly optimistic about the semiconductor industry, expecting chip sales to increase by 11% year-on-year. Preferred investment targets include Micron Technology, NVIDIA, AMD, Broadcom, and Marvell Technology
According to the Zhitong Finance and Economics APP, Citibank believes that artificial intelligence (AI) continues to lead the development trend of the semiconductor industry, and the positive performance of companies such as Texas Instruments (TXN.US) in the analog field indicates the recovery of this sub-market.
With the increasing demand for AI chips from government agencies, academic institutions, and businesses of all sizes, the market potential for AI chips is rapidly expanding. AMD (AMD.US) has raised its AI-related sales expectations for this year from $3.5 billion to $4 billion. Citigroup analyst Christopher Danely predicts that after Broadcom (AVGO.US) releases its financial report in June, the growth momentum in the AI field will be even stronger.
In the analog field, Danely is optimistic about the prospects of Microchip Technology (MCHP.US) and Analog Devices (ADI.US). He points out that the phenomenon of order cancellations at Microchip Technology has stopped, with order volumes rebounding. Therefore, he expects Texas Instruments' revenue guidance to increase by 4% compared to the previous quarter.
Danely stated in an investor report that the analog industry is expected to see inventory replenishment in the second half of 2024, and Texas Instruments' performance guidance for the second quarter of 2024 is expected to be raised.
In other aspects of the semiconductor industry, Intel's (INTC.US) personal computer business is impacted by execution issues, while AMD faces seasonal declines. Danely mentioned that the traditional data center market is currently affected by inventory adjustments and the loss of AI market share.
Despite this, the outlook for the wireless equipment and technology market is positive, but the AI-driven upgrade cycle may still take another year. Qualcomm's (QCOM.US) performance exceeded expectations, partly due to inventory replenishment in the mobile phone market.
Danely believes that although the automotive and industrial markets are still weak, the most difficult period seems to be over. He expects total chip sales to increase by 11% year-on-year to reach $582.4 billion for the year.
In the report, Danely emphasized that Citibank remains highly optimistic about the semiconductor industry and reiterated its preferred investment targets: in the AI field, including Micron Technology (MU.US), NVIDIA (NVDA), AMD, Broadcom, and Marvell Technology (MRVL.US); in the analog field, including Microchip Technology and Analog Devices; and in the equipment field, including Lam Research Corporation (LRCX.US) and Applied Materials (AMAT.US)