Key Takeaways
- Citi has initiated 30-day upside catalyst watches on Advanced Micro Devices and Analog Devices before their first-quarter earnings
- Advanced Micro Devices captured 41.3% of the server CPU market in Q4 2025, climbing from 39% in the previous quarter
- Both Analog Devices and Texas Instruments are implementing 10–15% price increases on analog chips in response to elevated input costs
- The investment bank forecasts 69% growth in hyperscaler capital expenditures for 2026
- Data center semiconductor market expected to reach $731 billion by 2028, according to Citi projections
As the semiconductor industry prepares for first-quarter earnings reports, Citi analysts have taken a measured stance overall while highlighting specific opportunities. The firm has spotlighted Advanced Micro Devices and Analog Devices as companies with notable near-term upside potential.
Both chip manufacturers received 30-day upside catalyst watch designations from the bank in anticipation of their forthcoming quarterly results.
For AMD, Citi maintained its Neutral recommendation while adjusting the price objective to $248, down from the previous $260 target. This revision reflects a new valuation methodology that separately evaluates the company’s CPU and GPU segments.
Advanced Micro Devices, Inc., AMD
The firm’s analysts made a modest upward revision to their 2026 earnings per share forecast for AMD, raising it to $6.38 from $6.34. The increase stems from anticipated stronger CPU sales driven by agentic AI application requirements.
AMD continues to make significant strides in the server processor arena. The company’s revenue share climbed to 41.3% in the final quarter of 2025, representing a gain from the 39% recorded in the preceding quarter. Meanwhile, Intel’s market position has eroded to 58.7%, a substantial decline from the 89.2% it commanded in early 2021.
Both major CPU manufacturers have communicated price increase plans to their customer base, with the adjustments scheduled to take effect in March and April.
What’s Ahead for AMD
Despite Advanced Micro Devices anticipating below-seasonal performance in the latter half of 2026, the company maintains confidence in client business expansion. The strategy centers on capturing additional market share and targeting premium market segments.
Citi anticipates AMD will exceed consensus Wall Street projections when it reports earnings, fueled by CPU pricing leverage and ongoing server market share expansion.
Regarding Analog Devices, Citi maintains a Buy recommendation with a $400 price objective. The catalyst watch designation relates to pricing dynamics in the analog semiconductor space.
Industry conference discussions and supply chain intelligence revealed that both Analog Devices and Texas Instruments are implementing price hikes ranging from 10% to 15%, attributed to rising input costs. Citi’s financial projections for Analog Devices currently exceed consensus estimates for both the April and July reporting periods.
Robust Data Center Momentum Continues
The data center category represents 34% of overall semiconductor demand and maintains its position as the sector’s most resilient segment. Citi’s models project a 69% expansion in capital spending among the five largest American cloud service providers for 2026, building on the 79% surge recorded in 2025.
The investment bank forecasts the complete data center semiconductor addressable market will achieve $731 billion by 2028.
Citi also expressed increased optimism regarding CPU demand generally, as the industry transitions toward inference-based and agentic AI applications that necessitate greater CPU computational capacity.
On the challenging side, Citi projects a 17% year-over-year decline in smartphone unit shipments as elevated memory pricing dampens consumer demand. Nevertheless, the firm believes Apple ecosystem suppliers including Skyworks and Qualcomm possess better defensive positioning than competitors in that segment.
February’s global PMI statistics revealed sustained momentum in computing and communications hardware, which Citi interpreted as evidence that AI infrastructure investment continues driving manufacturing sector activity.
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