Citigroup's favored chip stocks: Investment opportunities supported by strong AI infrastructure spending

LootboxPhobia · 2026-03-11T05:55:07+00:00

Citigroup Research recommends four semiconductor stocks, believing that AI infrastructure spending will drive market performance. Among them, Broadcom is seen as the best choice with a target price of $475, implying a 40% upside; NVIDIA has a target of $270, with the highest expected return; Texas Instruments and Chipone Systems are also favored, with target prices of $235 and $1,350 respectively. The overall trend indicates that AI demand continues to grow.

LootboxPhobia

2026-03-11 05:55:07

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Investing.com – Citi Research has doubled its mid-2026 outlook for four semiconductor stocks, believing that AI infrastructure spending and the self-rescue story of analog chips represent the clearest path to excess returns in the chip market, despite mixed overall market performance.

Broadcom is Citi’s top-ranked semiconductor stock, and the reasons are obvious.

The company’s earnings revision potential is the strongest among the entire coverage universe. After the December quarter results are announced, the consensus for fiscal 2027 earnings per share jumps 25%, reflecting accelerated demand for custom AI chips. Analysts expect this trend to continue through 2027.

Citi has a target price of $475 for Broadcom, implying a 40% upside from current levels, making it the most confident AI infrastructure investment pick in this sector.

NVIDIA remains a prime example of AI investment. Citi sets a target price of $270, implying a 52% upside, making it the highest expected total return among the stocks covered in this research.

The upcoming GTC conference is a recent catalyst, with investor focus on inference workloads, architecture shifts from DRAM/HBM to SRAM, and debates over co-packaged optical devices and copper wiring. Citi positions NVIDIA as a cornerstone for any serious AI portfolio.

Texas Instruments is a leader in the analog chip sector. Citi’s bullish thesis is based on internal gross margin expansion rather than a surge in cyclical demand.

This self-rescue momentum makes Texas Instruments relatively defensive in the semiconductor space, with nearly a 3% dividend yield providing rare income buffer among chip stocks. The $235 target price implies a 25% upside.

Monolithic Power Systems has risen into the top four thanks to its power semiconductor product cycle, which Citi believes is still in its early stages.

As AI data centers drive higher power density, Monolithic Power’s specialized solutions are becoming increasingly critical infrastructure.

The target price is $1,350, implying a 33% upside. For investors looking to participate in AI development without directly holding GPU giants, this is the most confident analog chip stock.

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