Advanced Micro Devices Inc. (AMD, Financials), the semiconductor company focused on processors and artificial intelligence chips, retained a Buy rating from Citi as the firm pointed to continued spending on AI infrastructure by major cloud providers.
Citi said higher capital spending plans from Google and Amazon support its positive outlook for computing semiconductors. Microsoft and Meta kept their 2026 spending forecasts largely unchanged, while Microsoft expects capital expenditures to grow in 2027.
The analysts named AMD a top pick, citing potential share gains in both graphics processors and central processing units.
Citi also reiterated its Buy rating on Texas Instruments, its preferred analog-chip stock. The firm expects industrial demand to rise 30% to 35% from a year earlier, with automotive growth of 12% to 15% and personal electronics growth of 6% to 8%.
Analog manufacturers have also raised prices to offset inflation, while lead times for some products have extended to 16 weeks. Citi said Texas Instruments' manufacturing capacity could help it capture additional market share as demand recovers.
Investors will next watch AMD's earnings and hyperscaler spending updates for evidence that AI demand is translating into stronger semiconductor revenue.