Despite the massive sell-off, the strong fundamentals remain unchanged! Citigroup continues to be bullish on the chip industry, with Micron Technology as the top pick.
Citigroup remains bullish on the semiconductor industry, as the bank believes that spending related to AI and memory will not slow down in the short term.
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After a volatile week, Goldman Sachs reevaluates AI stocks: high-quality companies are very attractive.
Goldman Sachs pointed out that even though the market is tired of AI concept stocks, high-quality AI stocks are still attractive as these companies have strong technical foundations, market positions, or growth potential in the AI field. In addition, Nvidia's financial report, which will be released at the end of this month, may have a major impact on the entire AI market.
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Citi Research: Bullish on the development prospects of the AI and semiconductor industry, with Micron Technology as the preferred choice.
Citigroup released a research report stating that American semiconductor stocks were recently heavily sold off, which was believed to be due to macroeconomic factors. In addition, the market had high expectations for the earnings of the sector's stocks, but the second-quarter performance seems relatively disappointing, leaving investors somewhat disappointed. The poor performance of NXP Semiconductors, Intel, GlobalFoundries, and Microchip Technology could be attributed to slower-than-expected replenishment of analog semiconductor inventories, as well as the downside risks in the automobile terminal market, which accounts for 14% of semiconductor demand. However, Citigroup remains bullish on the development prospects of the AI and semiconductor industry, expecting that the reduction in DRAM production capacity can sustainably drive up prices.
Citi: Don't panic about the sharp decline in chip stocks, now is a good time to buy.
Citibank pointed out that although there has been a sharp decline in US chip stocks, this is mainly due to macroeconomic factors and high expectations. Semiconductors markets are still bullish, mainly because the demand for AI and storage markets remains strong. It is expected that DRAM prices will increase by 62% YoY in 2024, and Micron's performance guidance may be revised upward.
S&P rises over 2%, the best in nearly two years, with chip stocks up about 7%, Nasdaq and Chinese stocks up 2.8%, and US Treasury yields and the yen falling for three consecutive days.
The latest employment data alleviates concerns over the US economy, and US stocks rose more than 1.7%. Nvidia's stock rose more than 6%, and Tesla, Alibaba, PDD Holdings, and Tencent ADR rose more than 3%. Bullish on weight loss drug reports, Eli Lilly and Co's stock rose more than 13%, and Novo-Nordisk A/S's US stock rose nearly 8%. The 10-year US Treasury yield rose above 4%, and short-term bond yields rose by 10 basis points. Oil prices rose for the third consecutive day, gold halted its five-day decline, and digital currency had a big increase.
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