Citi expects the rally in semiconductor stocks to continue. Which securities does he advise?

Citi believes that the growth of semiconductor stocks related to artificial intelligence will continue: Nvidia, Broadcom and Micron are benefiting from the AI boom, while the analog segment is starting to recover. The investment bank advised investors to take advantage of any possible drawdown to buy securities in this sector, and also named their favorites.

Citi has predicted continued growth in semiconductor stocks, Seeking Alpha reported. According to analysts, the drivers of the rally will be strong reports from companies related to artificial intelligence: for example, chipmakers Broadcom, which derives 31% of its revenue from AI, Micron (17%) and Nvidia (89%). Additionally, growth will be supported by increased capex from bigtechs like Meta, Microsoft and Google, which have grown their capex by a combined $18 billion in 2025.

In addition, experts pointed to a recovery in the analog segment: such chips are responsible for energy and signal management, for example. In the third quarter of 2025, analog chip manufacturers forecast revenue growth of 6% on average compared to the second quarter. According to Citi analysts, this is just the beginning: they predict a steady upswing in analog chips due to low inventories and rising demand.

The SOX Semiconductor Index fell 5% early in the reporting season due to disappointing results and lower forecasts, but it later rebounded from the drop and returned to a high - thanks largely to optimism about AI and a recovery in the analog chip segment, said Citi analyst Christopher Danely in a note cited by Seeking Alpha.

Amid expectations of further growth, Citi advised investors to take advantage of any drawdown in shares of AI boom beneficiaries to buy. Citi named Microchip shares as its best investment idea, but also advised buying Texas Instruments, Broadcom, Micron, Analog Devices and NXP Semiconductors.

- Microchip shares have gained 13.5% since the beginning of the year, and Wall Street consensus suggests that they have upside potential of another 18% from the closing price on August 18. 68% of analysts who have assigned ratings to the company's securities advise investors to buy them, while the rest recommend to hold.

- Texas Instruments shares are only 4.7% more expensive now compared to the beginning of 2025, but Wall Street on average suggests they could rise another 6.5%. 45% of analysts advise traders to buy the company's securities and the same number suggest holding previously purchased ones in a portfolio. The rest are in favor of getting rid of them.

- Broadcom 's stockhas jumped nearly 27% since the beginning of the year, and the average Wall Street target price suggests a decline of more than 1% from the last closing price. Nevertheless, analysts almost unanimously advise investors to buy the company's shares.

- Micron 's market value hasgrown even more strongly over the same period - by more than 45%. Wall Street puts its growth potential at almost a quarter more, and 85% of analysts who have assigned ratings to the company's securities advise them to buy.

- Analog Devices sharesare up 9%, but the average Wall Street consensus suggests a potential upside of another 13%. Almost 90% of analysts suggest investors to buy the company's shares, while the rest advise to hold.

- NXP Semiconductors ' stock is up nearly 11% since the beginning of the year. Wall Street consensus suggests that they have the potential to grow by the same amount. The vast majority of analysts - 85% - who have assigned ratings to the company's securities advise investors to buy them.

This article was AI-translated and verified by a human editor