Nvidia (NVDA), Broadcom (AVGO), NXP Semiconductors (NXPI), and Analog Devices (ADI) are Citi’s top picks in the semiconductor space, going into earnings season.
“We expect a good semis earnings season and expect Street estimates to go up across most of the coverage universe,” analyst Atif Malik wrote in a note to clients. “We like data center semis the most on AI and general-purpose server demand, followed by analog semis given low inventory and depressed margins. We are cautious on PC/smartphone exposed semis on higher [bill of materials] costs impacting unit growth negatively. Our top buy-rated picks are AVGO, NVDA, ADI, and NXPI.”
Delving deeper, Malik said that Broadcom and Nvidia offer “attractive entry points,” as AI-related chip stocks have pulled back recently, amid fears related to OpenAI (OPENAI) and Oracle (ORCL). “Fundamentally, compute and networking demand for next gen reasoning models is accelerating and will likely drive upside for both AVGO and NVDA which we see as core AI holdings,” Malik added. “Nvidia at CES talked about upside to data center demand and TSMC bumped up its 2026 sales/capex growth last week.”
Additionally, Malik said the upturn in the analog market appears to be getting closer and closer, but it’s unsure how long the upturn will last. As such, Analog Devices and NXP are considered the two most attractive in the space, Malik added, citing their respective valuations.
Lastly, Malik said he expects Qualcomm (QCOM) to move lower after it reports, due in part to concerns about the loss of its modem business with Apple (AAPL), while NXP Semiconductors is expected to move higher.