Citi: 3 Top Chip Stocks to Buy After Recent SOX Pullback

Citi told investors in a note on Monday that it views the recent pullback in semiconductor stocks as healthy and maintains three key names as its top buy-rated picks in the sector.

The Three Top Picks

• Broadcom (AVGO)
• Texas Instruments (TXN)
• Applied Materials (AMAT)

Analyst Rationale

Citi sees the recent pullback in the SOX index as a buying opportunity, citing strong fundamentals supporting current valuations. Analysts highlighted these companies' competitive positions in custom chips (AVGO), analog semiconductors (TXN), and manufacturing equipment (AMAT).

Context

The SOX index has seen a notable decline in recent sessions, but Citi views this as a healthy correction after previous gains. The bank did not mention any changes to ratings or price targets.

What to Make of It

Citi remains positive on the semiconductor sector long-term, with a clear preference for fundamentally strong names. Investors may see the current pullback as an entry point, but should consider sector volatility risks.