Advanced Micro Devices NASDAQ:AMD and Texas Instruments NASDAQ:TXN received renewed Buy endorsements from Citi on Monday, with the bank arguing that two powerful semiconductor trends remain intact: accelerating artificial-intelligence infrastructure spending and a broad recovery in analog-chip demand. The calls place AMD's approaching earnings report and TI's manufacturing strategy at the center of the sector's next test.

AMD sells high-performance CPUs and GPUs used in data centers, personal computers and gaming systems. Texas Instruments designs and manufactures analog and embedded chips that regulate power and process real-world signals across industrial equipment, vehicles and electronics.

Citi expects industrial analog-chip sales to grow 30% to 35% year over year, with automotive increasing 12% to 15% and personal electronics rising 6% to 8%. Higher prices and lead times stretching to 16 weeks suggest demand is tightening against available supply rather than merely benefiting from easy comparisons.

We expect ADI, ON, and MCHP to report similar end-market strength and pricing/lead-time dynamics, the analysts wrote. We remain buyers of TXN, our top analog pick, as its manufacturing capacity should position it to capture a greater share.

TI's latest results support that view. Second-quarter revenue jumped 23% to $5.46 billion, while operating profit increased 48%. Management guided third-quarter revenue to between $5.65 billion and $6.15 billion, indicating the recovery has further room to run.

For AMD, Citi pointed to rising capital expenditures from Alphabet and Amazon as evidence that hyperscaler AI demand remains strong.

We view hyperscalers' ongoing investment in AI infrastructure as supportive of our positive outlook on compute semis and are buyers of top pick AMD on GPU/CPU share gains, Citi analysts wrote in a note to clients.

Investor Takeaway On AMD Stock

AMD reports second-quarter results Tuesday, August 4, after the market closes, making data-center revenue, Instinct GPU deployments and server-CPU momentum the immediate catalysts. AMD previously guided for approximately $11.2 billion in revenue and a 56% adjusted gross margin.

For TI, investors should monitor whether stronger utilization and pricing translate into sustained margin expansion and free cash flow. Weakening orders or shorter lead times would challenge Citi's recovery thesis, while continued industrial growth would strengthen TI's case for capturing share through its expanded manufacturing capacity.