Key Takeaways
- Citi has placed 30-day catalyst watches on Advanced Micro Devices and Analog Devices in anticipation of their Q1 results
- Advanced Micro Devices captured 41.3% of the server CPU market in Q4 2025, climbing from 39% in the previous quarter
- Analog chip manufacturers including Analog Devices and Texas Instruments are implementing 10–15% price increases to offset rising input costs
- Hyperscaler capital expenditure is forecast by Citi to surge 69% throughout 2026
- The data center semiconductor market is projected to expand to $731 billion by 2028, according to Citi estimates
As the semiconductor industry prepares for first-quarter earnings releases, Citi analysts are adopting a measured stance on the sector while highlighting two particular chip manufacturers poised for near-term appreciation: Advanced Micro Devices and Analog Devices.
The investment bank has designated both companies with 30-day upside catalyst watches in advance of their quarterly financial disclosures.
For AMD, Citi maintained its Neutral stance while adjusting the price target downward to $248 from a previous $260. The adjustment reflects a new sum-of-the-parts methodology that evaluates AMD’s central processing unit and graphics processing unit operations as distinct entities.
Advanced Micro Devices, Inc., AMD
The firm modestly increased its 2026 earnings per share projection for AMD to $6.38 from $6.34, attributing the revision to strengthening CPU sales driven by agentic artificial intelligence applications.
AMD continues to capture market share in the server processor arena. The company’s revenue portion reached 41.3% during the final quarter of 2025, representing growth from 39% in the preceding three-month period. Meanwhile, Intel’s market share has contracted to 58.7%, a significant decline from 89.2% recorded in early 2021.
Both semiconductor giants have communicated price increase intentions to their customer base, with the adjustments taking effect during March and April.
What Lies Ahead for AMD
Despite AMD anticipating below-average seasonal performance in the latter half of 2026, the company remains optimistic about growth prospects in its client segment. Strategic priorities include capturing additional market share and focusing on premium product categories.
Citi anticipates AMD’s results will exceed Wall Street projections, supported by enhanced CPU pricing dynamics and persistent server market share expansion.
Regarding Analog Devices, Citi maintains a Buy recommendation with a $400 price objective. The positive catalyst designation stems from pricing momentum throughout the analog semiconductor space.
Industry conference discussions and supply chain intelligence indicate that both Analog Devices and Texas Instruments are implementing analog chip price increases ranging from 10% to 15%, justified by elevated input expenses. Citi’s financial models for Analog Devices already exceed consensus estimates for both the April and July reporting periods.
Data Center Momentum Continues
The data center category represents 34% of overall semiconductor demand and maintains its position as the market’s most robust segment. Citi projects capital investments by the five leading U.S. cloud infrastructure providers will expand 69% during 2026, following 79% growth in 2025.
The investment bank forecasts the complete data center semiconductor total addressable market will achieve $731 billion by 2028.
Citi expressed increasing optimism regarding CPU demand in general, as the industry transitions toward inference and agentic AI applications that necessitate greater central processing capabilities.
On the downside, Citi anticipates smartphone unit shipments will decline 17% year-over-year as elevated memory component costs pressure demand. Nevertheless, the firm believes Apple ecosystem suppliers including Skyworks and Qualcomm will demonstrate greater resilience than competitors in this category.
February’s global purchasing managers’ index data revealed sustained strength in computing and communications equipment sectors, which Citi interpreted as evidence that artificial intelligence infrastructure investments continue bolstering manufacturing activity.
