Chip earnings should improve this week - Citi
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Less exposure to PCs should result in better numbers from the semiconductor companies reporting earnings this week, Citi says.
"We believe the overall tone of earnings will improve this week after two of the larger companies - Intel (INTC) and Texas Instruments (TXN) - guided lower as we expected in our earnings preview," analyst Christopher Danely wrote in a note. "We believe the slowdown in the PC space contributed to both TXN and INTC guiding lower and the companies reporting this week donât have much exposure to PCs with the exception of AMD (AMC)."
"We also expect likely more instances of China COVID shutdowns, however we view these setbacks as temporary. We continue to favor stocks with expanding margins such as Micron (NASDAQ:MU), GlobalFoundries (GFS), ON Semi (ON), Analog Devices (ADI)."
"Our checks indicate the auto/industrial end markets remain strong with shortages remaining and the telco market remains strong as well," Danely added.
"We recommend investors stick with companies that still have margin upside such as Micron, ON, GlobalFoundries and ADI. Other Buy-rated stocks include Broadcom (AVGO), Marvell (MRVL), Nvidia (NVDA), Applied Materials (AMAT) and Lam Research (LRCX)."
Global chip sales rose 1.1% in March.