As the global semiconductor industry ushered in groundbreaking changes, Citibank recommended a range of stocks to seize this historic opportunity.
Citigroup said the global semiconductor industry will experience “pioneering changes” and named stocks that are optimistic about this theme.
Citibank analysts wrote in a research report: “We believe semiconductor architectures will evolve towards memory and logic integration for artificial intelligence computing.” Here are the stocks recommended by Citibank, which have huge upside potential according to FactSet's consistent price target forecast.
Nvidia
In Citibank's recommended stock list, investors prefer$NVIDIA (NVDA.US)$Definitely on the list. The company's stock price surpassed $1,000 for the first time since the earnings report was released last Wednesday. Recently, Nvidia's stock price has performed exceptionally well, rising nearly 13.5% over the past week and rising nearly 174% over the past year.
Of the 62 analysts covering Nvidia, 56 gave overmatch or buy ratings. According to FactSet, analysts' price target for the stock is $1174.4, which means 10.3% potential upside.
Citibank continues to be bullish on the stock, and Nvidia is expected to occupy 90-95% of the AI GPU (graphics processing unit) market share in 2024 and 2025. Analyst Atif Malik wrote that this will be supported by an accelerated roadmap and technology leadership from chip level to software level.
ASMPT and Ibiden
Among the stocks recommended by Citibank, those listed in Hong Kong$ASMPT (00522.HK)$Listed on the Tokyo Stock Exchange$Ibiden (4062.JP)$These are some of the more low-profile stocks.
Kevin Chen, an analyst at Citibank, wrote, “We are optimistic about ASMPT because we expect the company to benefit from growing demand for artificial intelligence drives, particularly TCB (hot press bonding machines) in its advanced packaging solutions.” He noted that ASMPT is TCB's main supplier, adding that the company is expected to have more “meaningful AI-related contributions” in 2024 and 2025. The stock was included in the Franklin FTSE Hong Kong ETF (1.1%).
Meanwhile, Citibank's optimism about iBiden stems from its large share of the high-end ABF (Ajinomoto Laminated Film) substrate market, including substrates for AI GPUs. Analyst Takayuki Naito added: “We are confident of medium-term earnings growth, and we expect strong sales of generative AI-related packages and the recovery of general-purpose server ABF substrates to the 2026 fiscal year.” Ibiden's weight in BlackRock's Future Technology ETF is 0.5%.
Samsung Electronics and SK Hynix
Korean tech giants$Samsung Electronics Co., Ltd. (SSNLF.US)$and SK Hynix are also on Citibank's recommendation list. Citibank's optimistic expectations for Samsung Electronics stem from the expectation that its high-bandwidth memory (HBM) shipments will increase by two to three times in 2024 and 2025. Citibank also indicated that SK Hynix expects to increase the supply of HBM3E chips by 2025 according to the customer roadmap. Analyst Peter Lee wrote, “While the market is concerned that HBM may be oversupplied, Hynix points out that the visibility of HBM demand is increasing against the backdrop of growing AI investments from cloud solution provider customers.”
These two stocks are in$iShares MSCI South Korea ETF (EWY.US)$und$Franklin Templeton Etf Tr Ftse South Korea Etf (FLKR.US)$There are deals in it.
Editor/Somer