Citi names three favorites in the semiconductor sector

Despite the recent decline in the semiconductor sector, investment bank Citi remains optimistic about the industry. According to the bank's assessment, this is a more temporary downturn and interest in the sector remains high.

Broadcom, Texas Instruments, and Applied Materials are named as Citi's favorites. According to analysts' estimates, profit forecasts for sector companies for 2027 have been increased by an average of 11-12 percent.

The market is increasingly discussing possible challenges related to supply. The main risk is associated with a deficit of certain components and DRAM memory, which could become particularly relevant in 2027. Despite this, demand for semiconductors remains high.

The main source of growth is data centers, whose development is driven by increasing demand for artificial intelligence infrastructure. According to Citi's assessment, approximately one-third of the sector's total demand in this direction comes from this segment.

On the other hand, relatively weak results are seen in the personal computer and mobile phone markets. Analysts attribute this to reduced consumer spending and supply-related difficulties. Against this backdrop, the automotive and industrial technology sectors are growing steadily.

Citi believes that despite short-term fluctuations, there remains growth potential in the semiconductor sector.

Source: Investing.com