KeyBanc Capital Markets spotlighted the semiconductor sector on Tuesday, highlighting themes like artificial intelligence, tariffs, and China demand based on its latest supply chain survey.

• Warning! GuruFocus has detected 3 Warning Signs with NVDA.

The firm described mixed findings. Analysts noted that while analog markets are generally quiet, recent tariff-driven inventory pull-ins have offered a short-term boost. China remained a relative bright spot, helping to offset weaker demand in North America and Europe. On the mobile front, iPhone sales held steady, while Android demand in China stayed strong due to extended subsidies.

For AI chips, Nvidia (NASDAQ:NVDA) continues to lead. KeyBanc said production of its new Blackwell chips is ramping smoothly, and supply of chip-on-a-wafer substrates appears stable. The firm expects Nvidia's 2025 GPU shipments to hit 5 million to 5.5 million. However, GB200 rack deliveries are falling short, with first-quarter volumes likely under 1,000 units versus a forecast of 2,000.

Meanwhile, Advanced Micro Devices (NASDAQ:AMD) was downgraded to Sector Weight from Overweight. KeyBanc cited concerns about slowing AI-related business in China, rising price competition from Intel (NASDAQ:INTC), and limited near-term share gains. While AMD's valuation remains relatively low, analysts flagged growing risks to margins.

In other findings, KeyBanc saw positive trends for Micron Technology (NASDAQ:MU) and Qualcomm (NASDAQ:QCOM), citing increased memory demand and strong Android handset sales in China. Feedback on Arm Holdings (NASDAQ:ARM) and Broadcom (NASDAQ:AVGO) was more mixed, while names like Marvell Technology (NASDAQ:MRVL) and ON Semiconductor (NASDAQ:ON) raised concerns due to weaker volumes linked to major clients like Amazon (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA).