AMD, Intel, others may be at risk from analog, non-AI data center weakness: Citi
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Investment firm Citi said on Monday that AMD (NASDAQ:AMD), Intel (NASDAQ:INTC) and several other semiconductor companies may be at risk from potential weakness in the analog and non-AI data center markets.
"Our checks in Asia suggest business has weakened in the analog and non-AI data center end markets and we believe this is why semi stocks have been selling off," analyst Christopher Danely wrote in an investor note.
Danely added the weakness in analog is likely due to an inventory correction and lower demand from China and Europe, while the data center weakness is due to spending being diverted to artificial intelligence and thus, Nvidia (NVDA).
As such, companies with the most risk include AMD (AMD), Intel (INTC), NXP Semiconductors (NASDAQ:NXPI), Texas Instruments (NASDAQ:TXN) and GlobalFoundries (GFS), Danely added. However, he thinks that most of the weakness is likely to show up next month, so companies might be "sanguine" at Citi's technology conference, scheduled to take place between September 6th and 8th. 
Danely said he expects that semiconductor stocks will likely "remain under pressure" due to weakening fundamentals and high valuations until at least October, but that 2024 should be a "good year" for the industry, with most of the inventory digestion over by the first quarter.
Micron (MU) is still the firm's top pick in the space due to the belief in a recovery in dynamic random access memory, while AMD (AMD), ON Semiconductor (ON), Analog Devices (ADI) and GlobalFoundries (GFS) are also rated buy, "as they should offer the most upside."

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