The global semiconductor industry is set to experience "groundbreaking changes," Citi said, naming stocks to play the theme. "We believe semiconductor architecture will evolve towards the direction of memory and logic integration for AI computing," the investment bank's analysts wrote in a May 17 research note. Here are six stocks from Citi's list, which stand out for having substantial upside potential, according to FactSet's consensus price targets. Nvidia Among Citi's list of top stocks is investor darling Nvidia . The company's shares crossed $1,000 for the first time following its earnings announcement last Wednesday. The stock has had an extraordinary journey of late, gaining nearly 13.5% over the last week and close to 174% over the past year. Of the 62 analysts covering Nvidia, 56 have an overweight or buy call. Analysts' target price on the stock is $1,174.4, representing 10.3% potential upside, according to FactSet data. Citi remains bullish on the stock and expects Nvidia to "represent 90 - 95% of the AI GPUs [graphic processing unit] market in C24 and C25." That will be "backed by an accelerated roadmap and a technology leadership going from the chip level to software level," analyst Atif Malik wrote. ASMPT and Ibiden Among the under-the-radar stocks on Citi's list is the Hong Kong-listed ASMPT and Tokyo Stock Exchange-listed Ibiden . "We are positive on ASMPT as we expect the company to benefit from increasing AI-driven demand for its advanced packaging solutions, notably for its TCB (thermocompression bonder)," the bank's analyst Kevin Chen wrote. He noted that ASMPT is a leading supplier of TCB, adding that the company is expected to have more "meaningful AI-related contribution" in 2024 and 2025. The stock is included in the Franklin FTSE Hong Kong ETF (1.1% weight). Meanwhile, Citi's optimism on Ibiden follows its "large market shares in high-end ABF [Ajinomoto Build-Up Film] substrates including for AI GPUs." "We remain confident of medium-term earnings growth on strong sales of generative AI-related packages and a recovery in general-purpose server ABF substrates toward FY3/26," analyst Takayuki Naito added. Ibiden has a 0.5% weighting in the BlackRock Future Tech ETF . Samsung Electronics and SK Hynix South Korean tech giants Samsung Electronics and SK Hynix also made Citi's list. The investment bank's optimism on Samsung Electronics follows expectations of a two-fold and three-fold increase in its high bandwidth memory (HBM) shipments in 2024 and 2025. Citi also noted that SK Hynix is looking forward to stronger supplies of HBM3E chips through to 2025, "in line with the customer's roadmap." "Despite market concerns on potential HBM oversupply, Hynix noted that HBM demand visibility is continuously improving amid CSP [cloud solution provider] clients' AI investment growth," analyst Peter Lee wrote. Both stocks are traded in the iShares MSCI South Korea ETF (Samsung Electronics has a 23.6% weighting and SK Hynix has a 8.4% weighting) and Franklin FTSE South Korea ETF (Samsung Electronics 16.4% and SK Hynix 8.3%). — CNBC's Michael Bloom contributed to this report.
