Citigroup Keeps Broadcom as Top Pick, Forecasts 69% Cloud Capex Growth
Citigroup retained Broadcom among its top semiconductor picks ahead of Q1 earnings, highlighting data center chips’ 34% share of sector demand and forecasting U.S. cloud capex growth of 69% in 2026. The firm flagged potential headwinds for smartphone chip suppliers from rising memory costs but sees analog price hikes supporting segment margins.
1. Analyst Rating and Outlook
Citigroup retains Broadcom among its top semiconductor picks ahead of Q1 earnings, highlighting AI-driven demand potential.
2. Data Center Demand Impact
The bank notes that the data center segment represents 34% of semiconductor demand and expects U.S. cloud provider capex to grow 69% in 2026, supporting Broadcom’s infrastructure chip sales.
3. Smartphone Segment Headwinds
Rising memory costs are anticipated to weigh on low-end smartphone unit demand, posing risks for Broadcom’s mobile chip revenue.
4. Analog Market Price Increases
Broadcom's analog semiconductor business benefits from input cost-driven price increases of 10–15%, bolstering margin resilience.