GFS - Micron leads chips higher as Citi reiterates favoritism once downturn ends

2023-05-15 14:36:33 ET

Micron Technology ( NASDAQ: MU ) led S&P 500 semiconductor stocks higher on Monday after Citi reiterated it is one of the firm's favorite chip stocks to own once the current downturn ends.

In a note to clients, Citi analyst Christopher Danely said the firm is still "defensive" on the sector following an earnings season that featured a number of "negative" revisions, but that Micron ( MU ), along with AMD ( NASDAQ: AMD ), ON Semiconductor ( ON ) and GlobalFoundries ( GFS ) are the semiconductor stocks to own after the slide.

Currently, the firm's favorite semiconductor stock is Analog Devices ( NASDAQ: ADI ), even as there are several positive signs for the broader industry, including the stabilization of PC sales, AI driving growth and the fact that the handset market looks "close to a bottom."

Micron ( MU ) shares rose nearly 5% shortly before 2:30 p.m. EST, while AMD ( AMD ), ON ( ON ) and GlobalFoundries ( GFS ) gained 1.7%, 0.8% and 1.7% , respectively.

Analog Devices ( ADI ) also traded higher, adding 1.6% .

In a separate note, Citi reiterated its neutral ratings on AMD ( AMD ) and Intel ( INTC ) after April notebook data showed shipments fell 24% month-over-month.

Intel ( INTC ) shares rose nearly 2% on Monday.

Western Digital ( NASDAQ: WDC ) shares surged more than 10% after it was reported that discussions with Kioxia Holdings are speeding up and getting closer to a deal following the memory chip downturn.

Seagate ( STX ), which competes with Western Digital ( WDC ), rose more than 5% following the news.

Other semiconductor stocks were higher on Monday, including gains of 1% or more for Nvidia ( NVDA ), Texas Instruments ( TXN ), Qualcomm ( QCOM ) and NXP Semiconductors ( NXPI ).

Smartphone linked semiconductor stocks also traded higher, as Skyworks Solutions ( SWKS ) and Qorvo ( QRVO ) added 1.7% and 1.9% , respectively.

More on semiconductors and the future

• Citi reiterates buys on Micron, Samsung, SK Hynix as memory looks to recover
• AMD's opportunity in AI may be much bigger than first believed: Morgan Stanley
• Nvidia Is Overvalued Under Every Fundamental Scenario

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