Citi analysts assigned Micron Technology (NASDAQ:MU) as a new top pick, maintaining a Buy rating and $75 price target on the stock in a note to clients on Monday.
The analysts said they believe the China ban on Micron should put the company "in position to get more money from the CHIPS Act, given that most companies appear to be opting for the minimum $150.0 million given costly contingencies."
"We are changing our relative ratings and moving Micron to our top pick, with ON second, and dropping ADI to third given continued concerns in the automotive and analog space," they wrote.
In the memo on US semiconductors, the analysts said they spent the week meeting companies in Taiwan and noted that while companies directly connected with generative AI continue to shine, "the rest of the semiconductor market remains tepid with sluggish demand and high inventory."
As a result, Citi reiterated its cautious stance on the group "given the melt-up driven by AI hype."