Citi Sees Semiconductor Stock Pullback as Buying Opportunity Amid AI Concerns

Citi analysts have identified the recent downturn in semiconductor stocks as a potential buying opportunity, spurred by macroeconomic concerns and uncertainty surrounding AI spending. They project a 3% increase in the 2025 wafer fabrication equipment market, driven by anticipated growth in NAND memory demand. While acknowledging risks such as geopolitical tensions, they remain optimistic about a 40% increase in data center capital expenditure among major U.S. companies in 2025, fueled by ongoing AI investments. Additionally, the Vanguard S&P 500 ETF, while tracking leading AI stocks, notably excludes some key semiconductor firms that are pivotal to AI advancements, such as Marvell Technology. Investors are encouraged to consider these overlooked stocks to enhance their portfolios amid the S&P 500's focus on established AI leaders. Overall, the semiconductor sector demonstrates a path to growth despite current challenges.