AMD Crowned Favourite Chip Stock Among Investors, Says Citi

AI Boom and Strong Earnings Growth Propel AMD Ahead of Nvidia and Other Rivals

AMD Takes the Lead in Investor Sentiment

Advanced Micro Devices (AMD) has emerged as the top choice among semiconductor investors, according to a recent note from Citi. Analyst Christopher Danely stated that AMD is now the “king of the hill” in the chip sector, with momentum driven by strong earnings growth expectations and robust investor support.

• AMD is Citi's most favoured semiconductor stock
• Expected to deliver the highest EPS growth in calendar 2027 (C27)
• Revenue and margin guidance seen as highly encouraging
• EPS target of $20 driving investor confidence

Danely attributed AMD’s rise to its clear communication during a recent analyst day, where the company outlined ambitious but credible margin and revenue targets. The chipmaker’s alignment with the artificial intelligence (AI) boom also positions it well for future growth.

AVGO (Broadcom) Also Ranks Highly

While AMD leads, AVGO (Broadcom) ranks closely behind in investor preference. Citi acknowledges continued optimism around AVGO’s prospects but notes some uncertainty regarding merchant Tensor Processing Unit (TPU) sales.

• AVGO seen as a “top holding” by many investors
• Citi expects upward movement after its next earnings report
• Merchant TPU questions creating some short-term hesitation

Nvidia Slips in Popularity

Despite being a key player in AI and gaming chips, Nvidia (NVDA) has fallen behind AMD and AVGO in terms of investor enthusiasm. Citi attributes this to Nvidia’s relatively lower expected earnings per share (EPS) growth.

• Nvidia remains a significant player, but no longer the top pick
• Investor preference shifting due to growth comparisons
• Still a core holding in many semiconductor portfolios

Intel: Hope Rides on Foundry Business

Intel continues to attract investor attention, mostly based on potential growth in its foundry business and a rebound in server CPU demand. However, Citi remains cautious.

• Speculation surrounds additional foundry deals
• Concerns about profitability persist
• No clear path to matching rivals' margins

Micron and Equipment Makers Face Investor Doubts

Citi also commented on the limited investor interest in Micron and semiconductor equipment firms. Many investors remain sceptical about Micron's ability to return to its peak profit margins last seen in 2017.

• Micron struggling to shake off past performance doubts
• Equipment makers also not benefiting fully from AI tailwinds
• Citi remains bullish but notes resistance among investors

Why AMD’s Momentum Matters

Citi’s bullish stance on AMD comes at a time when the AI revolution is reshaping tech stock dynamics. With chips forming the backbone of AI infrastructure, companies with strong AI-linked earnings growth are drawing the most capital.

Additional insights from industry watchers and financial news suggest AMD could continue to gain ground as AI applications proliferate across sectors—from cloud computing to autonomous vehicles and beyond.

Implications for UK and Global Investors

For UK investors tracking the US tech sector or holding tech ETFs, AMD’s momentum signals broader trends in the semiconductor space. As global portfolios increasingly reflect AI optimism, AMD’s rise may influence the weighting of chip stocks in widely-held investment funds.

Key Takeaways

• AMD is now the most favoured chip stock, according to Citi
• Strong EPS projections and AI positioning drive investor flows
• AVGO maintains strong appeal, while Nvidia loses some ground
• Intel draws speculative interest; Micron struggles with scepticism
• AI-linked earnings growth continues to be the dominant driver

Conclusion

As the semiconductor sector undergoes rapid transformation driven by AI demand, investor focus is shifting toward companies with the clearest growth trajectories. AMD’s positioning, guidance, and market narrative place it at the top of the leaderboard—for now.

Sources: (Investing.com, Reuters.com)