TLDR
- Citigroup selected Nvidia, Broadcom, Texas Instruments, and Monolithic Power Systems as its four leading semiconductor choices
- Data centers represent 34% of semiconductor demand, fueled by spending on AI infrastructure
- Nvidia sales hit $68.1 billion, a 73% annual increase; Broadcom revenue grew 29% to $19.31 billion
- Citi established price targets of $270 for Nvidia and $475 for Broadcom
- Qualcomm and Intel were given only Neutral ratings, due to weaker prospects linked to PC and smartphone markets
Citigroup analysts identified four semiconductor firms as their favorite chip stock selections after the most recent earnings season. The bank issued Buy ratings for Nvidia, Broadcom, Texas Instruments, and Monolithic Power Systems.
The bank stated data centers now comprise approximately 34% of total semiconductor demand. Continued investment in AI infrastructure is the primary factor sustaining this robust demand.
Citi considers Nvidia and Broadcom essential holdings for investors aiming to benefit from AI-related expenditure. Texas Instruments and Monolithic Power were emphasized for their product cycles and internal enhancements.
NVIDIA Corporation, NVDA
Nvidia announced $68.1 billion in sales for its most recent quarter, a 73% jump from the prior-year period. The majority of this growth originated from AI chips utilized in data centers by major cloud providers.
Citi assigned a $270 price target to Nvidia. Wall Street analysts forecast approximately 49% upside for the stock, alongside a consensus Strong Buy rating.
Broadcom recorded revenue of $19.31 billion in its first fiscal quarter of 2026, a 29% year-over-year increase. Adjusted earnings per share were $2.05, narrowly exceeding the $2.03 consensus estimate.
AI Demand Drives Chip Sector Gains
Citi set a price target of $475 for Broadcom. Analysts anticipate roughly 33% upside from present levels, also with a Strong Buy rating.
Texas Instruments reported quarterly earnings per share of $1.27, marginally below the $1.29 estimate. Revenue was $4.42 billion, just shy of the $4.44 billion Wall Street anticipated, though it marked a 10% annual rise.
The company provided guidance for the ongoing quarter, forecasting revenue in the range of $4.32 billion to $4.68 billion. Citi’s price target for Texas Instruments is $235, suggesting about 13.47% upside.
Monolithic Power Systems surpassed estimates, posting earnings per share of $4.79 versus expectations of $4.73. Revenue reached $751.2 million, an increase of around 20.8% year-over-year and above forecasts of $740 million.
Monolithic Power projected first-quarter revenue between $770 million and $790 million. Analysts see approximately 23% upside, with a Strong Buy rating.
PC and Smartphone Chipmakers Face Softer Outlook
Not every chipmaker earned a spot on Citi’s favored list. The bank gave Neutral ratings to Qualcomm and Intel, pointing to softer demand associated with the PC and smartphone sectors.
Citi observed that increasing memory costs might pressure shipments in those markets. Price targets for Qualcomm and Intel were set at $140 and $48, respectively.
The industrial chip market, accounting for about 10% of semiconductor demand, is performing a bit better than typical seasonal patterns. The automotive chip segment, representing roughly 11% of demand, remains stable.
Citi’s $1,350 price target for Monolithic Power is the highest among the four selected companies.