Analog Devices top semiconductor stock at Citi, citing firm's 'defensive stance'
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Analog Devices (NASDAQ:ADI) is investment firm Citi's top semiconductor stock, noting its "defensive stance" in light of worries over earnings cuts and weakening demand in PCs and cell phones, which account for roughly half of all semiconductors.
Analyst Christopher Danely noted that the weak demand in PCs and cell phones should lead to a correction in automotive and data centers over the next few quarters, citing lower demand and an inventory build up. 
"While the SOX index has declined roughly 35%, we believe stocks can fall by at least another 15% given consensus estimates should decline by 25%," Danely wrote in a note to clients.
While Analog Devices (ADI) is tops right now, stocks such as Micron (MU), ON Semiconductor (ON), Global Foundries (GFS) and Advanced Micro Devices (AMD) are preferred, "as they should offer the most upside."
In addition, Danely noted that more capital expenditure cuts are expected, following Micron's (MU) cut earlier this month.
"We view these cuts positively as it mitigates oversupply and shortens the semi correction," Danely added. 
Last month, investment firm Bank of America expressed its preference for Analog Devices (ADI), stating that it has overtaken Texas Instruments (TXN) as the top analog chip company due to "accelerating" free cash flow returns.