Micron Technology (NASDAQ:MU) and Broadcom (NASDAQ:AVGO) remain Citi's top semiconductor stocks tied to artificial intelligence, even as the sector saw a sales slowdown in January.
According to the Semiconductor Industry Association, monthly semiconductor sales fell 14% month-over-month to $50.8 billion, below the typical 9.1% seasonal decline and Citi's estimate of $52.3 billion. Weak memory and microcontroller sales contributed to the drop.
Despite the volume decline, pricing trends outperformed expectations, with prices (excluding discrete semiconductors) rising 11.2% month-over-month, well above Citi's 1.6% estimate and the historical 0.1% average decline.
Citi analyst Christopher Danely expects below-seasonal semiconductor sales in Q1 2025 but remains bullish on the sector, citing strong AI-driven demandrepresenting about 20% of the semiconductor marketand a projected rebound in analog chip inventory later in the year.
In the analog segment, Citi's top pick is Texas Instruments (NASDAQ:TXN), followed by Microchip (NASDAQ:MCHP), Analog Devices (NASDAQ:ADI), and NXP Semiconductors (NASDAQ:NXPI). Despite the weak January, Citi still forecasts 13% year-over-year semiconductor sales growth to $709.5 billion in 2025.
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