Citi Shifts Chip Stock Preference to AMD Following Analyst Day
NEW YORK, November 19, 2024 – Citigroup has revised its stance on leading semiconductor companies, naming Advanced Micro Devices (AMD) as its preferred pick following a recent Analyst Day presentation that impressed investors with ambitious long-term targets. The firm believes AMD is best positioned to capitalize on key growth areas including AI servers,data center cpus,and upcoming product launches,giving it an advantage in the current semiconductor cycle.
Citi analyst Atif Malik, in a note to clients, highlighted AMD’s goals of achieving a greater than 35% revenue compound annual growth rate (CAGR) and adjusted earnings per share (EPS) exceeding $20 as key drivers of increased confidence in the stock. The company is aiming to lead in the projected $1 trillion compute market.
The shift in preference comes as investors reassess major chip names. While Broadcom (AVGO) remains a widely held stock, investors are seeking clarity on its potential gains from selling Tensor Processing Units (TPUs) for AI workloads, with sentiment expected to improve after the company’s upcoming earnings report.
Notably, Nvidia (NVDA), previously the frontrunner in the AI rally, is now less favored due to concerns that its earnings growth may decelerate. nvidia is reporting its fiscal Q3 2026 results today, November 19, with Wall Street anticipating earnings of $1.25 per share, a 53% year-over-year increase, and revenue of $54.85 billion, up 56% from the same period last year.
Sentiment towards Intel (INTC) is cautiously improving, with some investors optimistic about its server chip business. However, Malik remains skeptical about the near-term profitability of Intel’s foundry business.
According to TipRanks data, Nvidia currently offers the highest upside potential among the four stocks, at 34%, with a Strong Buy rating. AMD follows with an expected upside of approximately 22% and a Moderate Buy rating. Broadcom also holds a Strong Buy rating, but with a lower upside of around 17%. Intel exhibits the smallest projected upside at just over 3%, and is currently rated as a Hold by analysts.
