Monty Rakusen
Semiconductor stocks may have a more "muted" earnings season than past quarterly reports, Citi said, due in part to AMD (NASDAQ:AMD).
The investment firm does not expect the Dr. Lisa Su-led AMD to raise its forecast for artificial intelligence revenue until the summer, while analog semiconductor companies are likely to post results and guidance that are roughly in-line with guidance, while providing positive commentary on guidance for the second-half of the year, analyst Christopher Danely said.
The analog industry is likely to go through inventory replenishment in the second-half of the year, which could result in actual results being better than consensus estimates, Danely added. He expects Microchip (MCHP) is likely to have the most positive action during earnings season.
Danely opened up a 30-day positive catalyst watch on Micrchip based on negative sentiment surrounding the stock and positive commentary on bookings for the second-half of the year.
Additionally, the PC and smartphone markets — which account for roughly 39% of the semiconductor total addressable markets — seem to have stabilized, Danely said, though the traditional server market continues to remain weak.
A 30-day positive catalyst watch was also opened on Intel (INTC) amid negative sentiment and the potential for upside to consensus estimates.
Micron (MU) is still Citi's top pick in the space and the investment firm reiterated its bullish stance on AMD, Nvidia (NVDA), Broadcom (AVGO) and Marvell (MRVL) in artificial intelligence and Lam Research (LRCX) and Applied Materials (AMAT) in semiconductor equipment.
(This story has been updated to include positive catalyst watches on Microchip and Intel.)