Citigroup is optimistic about the short-term stock performance of AMD and Analog Devices, viewing the Apple supply chain as a high-quality defense

According to the Zhitong Finance APP, at a critical moment when the semiconductor industry is about to enter the first quarter earnings season, Citibank's latest analysis report has injected new expectations into the market. Citibank analysts announced a 30-day "Positive Catalyst Watch" for chip giant AMD (AMD.US) and analog chip leader Analog Devices (ADI.US), showing strong confidence in the short-term stock performance of these two companies. Despite the potential shipment volume decline pressure in the global smartphone market due to rising memory prices, Citibank remains optimistic about core suppliers in Apple's supply chain, believing that the resilience of the high-end market will serve as a safe haven amid industry turbulence.

Regarding AMD's positive outlook, Citibank emphasized the significant demand boost for server CPUs driven by the emerging trend of "Agentic AI." The analysts pointed out that as AI applications evolve from basic reasoning to more complex autonomous agent tasks, the demand for high-performance processors is surging. Meanwhile, AMD's market share in the server segment continues to expand, with its revenue share climbing from 39% in the third quarter of 2025 to 41.3% in the fourth quarter.

Combining AMD's and Intel's (INTC.US) recent potential price increase plans—both companies plan to gradually raise CPU product line prices starting in March and April—Citibank slightly lowered AMD's target price to $248 due to valuation method adjustments, but simultaneously raised its earnings per share forecast for 2026, noting that market sentiment before and after the earnings report will provide strong support for the stock price.

In the analog chip sector, Analog Devices is seen as the leader in the industry's recovery. Citibank set its target price at $400 and maintained a "Buy" rating, primarily driven by a wave of cost-push price increases in the analog chip industry. February's global PMI data shows "sustained resilience," especially in the computer and communication equipment sectors, which Citibank believes indicates that AI infrastructure construction is boosting manufacturing activity.

Additionally, industry research shows that Analog Devices and major players like Texas Instruments (TXN.US) are expected to raise product prices by 10% to 15%. In Citibank's view, Analog Devices not only benefits from price improvements but is also the preferred choice for investors in the analog semiconductor recovery cycle.

In the data center sector, Citibank expects capital expenditures from hyperscale cloud service providers to grow by 69% this year. The investment firm also anticipates that, driven by strong demand from hyperscale cloud service providers, enterprise customers, emerging cloud service providers, and sovereign AI clients, the overall potential market size will reach $731 billion by 2028. Furthermore, Citibank stated that as the industry transitions to inference and agent AI—fields that require more CPU resources—its attitude towards CPU demand is "more positive."

For the overall consumer electronics chain, Citibank's strategy leans towards "selective layout." Although it predicts that global smartphone shipments may decline by 17% this year due to cost premiums, suppliers like Skyworks Solutions (SWKS.US) and Qualcomm (QCOM.US) representing Apple are considered more defensive Citigroup analysts believe that the high-end market demand represented by the Apple ecosystem is less affected by macroeconomic fluctuations, and during the upcoming earnings report window, these suppliers are expected to exceed market expectations with robust profit margins and order volumes. This differentiated layout based on the prosperity of specific segments forms the core logic of Citigroup's semiconductor strategy report this time