This week’s chip stock sell-off is a buying opportunity for investors, according to Citigroup. “We think it’s time to double down on Micron because we believe [dynamic random access memory] “The market will remain tight due to the oligopoly,” analyst Christopher Danely wrote in a 24-page report, calling the stock Citi’s top pick. Chip stocks have sold off this week amid a broader reckoning over the tech sector since mid-June. That weakness accelerated after Friday’s sluggish July jobs report and the Bank of Japan’s surprise rate hike, prompting many investors to abandon their yen-yield carry trades, buying the yen and selling the dollar. The VanEck Semiconductor ETF has climbed SMH 1M in the past month. Danely also blamed disappointing results from semiconductor and semiconductor equipment companies for the sector’s decline. The VanEck Semiconductor ETF has fallen 21% in the past month. The San Francisco-based analyst added that “very high” expectations at its peak meant the PHLX Semiconductor Index was trading 70% higher than it had been in the past month. with the S&P, its highest valuation since 2008. Earnings estimates for calendar year 2025 were also down 11%, in part due to disappointing results from Intel, NXP Semiconductors, and Microchip Technology. Along with Micron Technology, Danely named Advanced Micro Devices, Nvidia, and Analog Devices among his top picks. “AI and memory remain the leaders—we remain bullish,” he wrote. “Fundamentals for the AI and memory markets (about 30% of semiconductor demand) remain strong with AI [capital expenditures] increased and DRAM prices were better than expected in Q3 2024.”