Citigroup raises bullish call as August chip sales surge: Analog Devices (ADI.US) remains top pick
AInvestTuesday, Oct 8, 2024 9:10 am ET
1min read
ADI --
AMD --
C --

Zhitong Finance learned that Citigroup is increasing its bullishness in the semiconductor sector after seeing stronger-than-expected semiconductor sales data in August. Analog Devices (ADI.US) remains Citigroup's top pick in the sector, while the investment bank also gives "buy" ratings to AMD (AMD.US), Broadcom (AVGO.US), Micron Technology (MU.US), Microchip Technology (MCHP.US) and Texas Instruments (TXN.US).

Citigroup analyst Christopher Danely wrote in an investor report: "We raised our 2024 semiconductor revenue forecast from 14% YoY to 17% YoY, or US$616.6bn, as we expect growth in Q3 and Q4 of 2024 to be above seasonal growth. We expect the number of products without discrete devices to grow YoY by 1%, and the average selling price to grow YoY by 18%."

Danely added that the strong performance in August was largely driven by DRAM chips, which "exceeded seasonality". Total sales in August were US$56.2bn, topping Danely's US$51.4bn estimate; sales rose 15.4% MoM, topping Danely's 5.7% MoM growth and 6.7% seasonal growth. Pricing "far exceeded seasonal factors", with the average selling price of products without discrete devices up 14.2% MoM, topping Danely's 2.7% and 5.7% seasonal average rise.

The average selling price of products without discrete devices rose 29% YoY, far topping Danely's 16.1% forecast. Danely wrote: "With a 19% YoY decline in 2023, the worst adjustment since 2001, we believe there will be inventory replenishment, and the YoY growth should continue to rise."

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.