The global semiconductor industry is poised for “revolutionary change,” Citi said, citing stocks to play up that theme. “We believe semiconductor architecture will evolve toward integrating memory and logic for AI computing,” analysts at the investment bank wrote in a May 17 research note. Here are six stocks on Citi’s list that stand out for their substantial upside potential, according to FactSet consensus price targets. Nvidia Among Citi’s list of top stocks is investor darling Nvidia. The company’s shares crossed the $1,000 mark for the first time following the earnings announcement last Wednesday. The stock has had an extraordinary run of late, gaining nearly 13.5% over the past week and nearly 174% over the past year. Of the 62 analysts covering Nvidia, 56 have an overweight or call option. Analysts’ target price on the stock is $1,174.4, representing 10.3% upside potential, according to FactSet data. Citi remains bullish on the stock and expects Nvidia to “account for 90-95% of the AI GPU (graphics processing unit) market in the C24 and C25.” This will be “supported by an accelerated roadmap and technology leadership from the chip level to the software level,” wrote analyst Atif Malik. ASMPT and Ibiden Among the little-known stocks on Citi’s list are ASMPT, listed in Hong Kong, and Ibiden, listed on the Tokyo Stock Exchange. “We are positive on ASMPT as we expect the company to benefit from growing AI-driven demand for its advanced packaging solutions, including its TCB (thermocompression binder),” wrote the bank’s analyst, Kevin Chen. He noted that ASMPT is a leading provider of TCB, adding that the company is expected to have a “significant AI-related contribution” in 2024 and 2025. The stock is included in the Franklin FTSE Hong Kong ETF (weighting of 1.1%). Meanwhile, Citi’s optimism about Ibiden follows its “significant market shares in high-end ABF (Ajinomoto Build-Up Film) substrates, including for AI GPUs.” “We remain confident in medium-term earnings growth driven by strong sales of generative AI-related packages and a recovery in ABF substrates for general-purpose servers by FY3/26,” added l analyst Takayuki Naito. Ibiden has a 0.5% weighting in the BlackRock Future Tech ETF. Samsung Electronics and SK Hynix South Korean tech giants Samsung Electronics and SK Hynix were also on Citi’s list. The investment bank’s optimism about Samsung Electronics follows expectations for a two- to three-fold increase in its high-bandwidth memory (HBM) shipments in 2024 and 2025. Citi also noted that SK Hynix expects a larger supply of HBM3E chips until 2025, “in line with the customer’s roadmap.” “Despite market concerns over potential HBM oversupply, Hynix noted that HBM demand visibility is continually improving amid growing AI investments from CSP (cloud solution provider) customers “wrote analyst Peter Lee. Both stocks are traded in the iShares MSCI South Korea ETF (Samsung Electronics has a 23.6% weighting and SK Hynix has an 8.4% weighting) and the Franklin FTSE South Korea ETF (Samsung Electronics 16 .4% and SK Hynix 8.3%). — CNBC’s Michael Bloom contributed to this report.
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