Analog Devices still Citi's top pick as firm stays cautious after November chip sales
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Analog Devices (NASDAQ:ADI) is still Citi's top pick in the semiconductor industry as the investment firm has remained cautious on the sector following newly released sector data. 
Over the weekend, the Semiconductor Industry Association said November monthly sales fell 2.2% month-over-month to $43B, below the 0.7% month-over-month rise that has happened in the past and below the firm's estimate of $45B. 
"We maintain our 2022 forecast of up 4% [year-over-year] but lower our 2023 semi sales from down 7% [year-over-year] to down 10% [year-over-year] driven by the inventory build and recession," Citi analyst Christopher Danely wrote in a note to clients.
Danely said that Analog Devices (ADI) is still the firm's top pick given its defensive nature.
Among the reasons Danely remained upbeat on Analog Devices (ADI) were that the company's unit growth was below seasonality at a decline of 2.2% month-over-month, with weakness in the analog, microprocessor and memory areas of the industry. In addition, pricing was also below what it had been seasonally, as the average selling price, excluding discrete, was down 0.1% month-over-month, below the firm's estimate of 3.2% month-over-month and seasonal pricing of 1.4% month-over-month.
He also lowered semiconductor sales for 2023 to a decline of 10% year-over-year from a previous view of a 7% year-over-year slide. Danely said this was due to "below seasonal growth" in the first half and what is expected to be "seasonal growth" in the second-half of the year.
Along with Analog Devices (ADI), Intel (INTC), Qualcomm (QCOM) shares each rose 2%, Nvidia (NVDA) and Advanced Micro Devices both surged by more than 6%, Texas Instruments (TXN) shares were up by 2%, and Micron Technology (MU) managed to nudge into positive territory.
Last month, Susquehanna started coverage on Analog Devices (ADI), putting a positive rating and a $205 price target on the semiconductor company.