Citi stays cautious on chips even as May monthly sales tick up
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Investment firm Citi said on Wednesday that it is staying cautious on semiconductor stocks even as industry data from May showed a larger-than-expected increase.
Citing data from the Semiconductor Industry Association, Citi analyst Christopher Danely noted that May monthly sales came in at $40.3B, up 5.7% month-over-month, above the seasonality of 3.7% month-over-month and above Citi's own estimate of $38.4B.

However, the firm still sees chip sales down 15% year-over-year in 2023, due in large part to weakness in the auto market.
"We remain cautious on the group and highlight [Micron] as our top pick," Danely wrote in an investor note.
Aside from Micron (NASDAQ:MU), Danely also likes ON Semiconductor (ON), GlobalFoundries (GFS) and AMD (AMD), noting that the quartet offer "the most upside" when it comes to increasing margins and earnings per share in the sector.