Chip stock pullback is buying chance, Citi says; data centers to exceed total chip market by 2030

Citi analysts are positioning the recent selloff in semiconductor stocks as a tactical buying opportunity, arguing that underlying fundamentals remain resilient despite macro headwinds. The firm's thesis centers on data centers, which now account for 34% of total semiconductor demand and are projected to exceed the entire semiconductor total addressable market by 2030—a significant inflection point that signals the durability of AI infrastructure investment.

Reviewing earnings reported so far this season, Citi found that consensus revenue estimates for 2026 and 2027 among companies that have reported rose 4% and 7% respectively, while earnings-per-share estimates increased 7% and 8%. These revisions suggest that despite the pullback, the street is not cutting estimates materially; instead, sentiment is stabilizing. Auto and industrial demand, representing 21% of the market, is recovering, though PCs, handsets, and consumer electronics—a combined 42% of the market—continue to weaken due to memory cost inflation and supply constraints.

Citi's most bullish call is on semiconductor capital equipment stocks rather than the chip stocks themselves, citing "higher estimate revisions driven by capex increases." That thesis is anchored in aggressive capex guidance from three major players. Intel raised its 2026 capital expenditure guidance to more than $20 billion（約3.2兆円） from roughly $18 billion（約2.9兆円） previously, driven mainly by tool purchases growing 40% year-over-year, and signaled that 2027 capex will be significantly higher, with most investment directed toward U.S. manufacturing. TSMC raised its 2026 capex guidance again, to $60–64 billion from nearly $56 billion（約9兆円）, citing stronger-than-expected AI demand and higher equipment costs; the company also stated that capital spending over the next three years will be significantly higher than the prior three years and announced an additional $100 billion（約16兆円） investment in Arizona, bringing its total commitment there to $265 billion（約42兆円） and including roughly four additional fabs. Tesla reiterated that its 2026 capex will exceed $25 billion（約4兆円） and continue growing over the next two to three years, including investments in semiconductor manufacturing.

On the supply-chain backend, Amkor announced a $1.5 billion（約2400億円） multi-year partnership with Nvidia to support U.S. advanced packaging capacity, with Nvidia providing a prepayment to fund the expansion. These commitments collectively signal that chipmakers view near-term demand as sufficiently robust to justify substantial capital deployment, a signal that equipment makers and backend service providers are positioned to benefit disproportionately.

The semiconductor sector is experiencing a temporary pullback amid macro headwinds—rising oil and bond yields paired with uncertainty about AI capital spending—yet Citi's analysis reveals structural strength underneath. Data centers have become the sector's anchor, now representing 34% of total demand and positioned to surpass the entire semiconductor market by 2030, a milestone that underscores the AI infrastructure buildout's scale. This shift is reflected in recent earnings revisions: consensus revenue estimates for 2026 and 2027 among reporting companies rose 4% and 7% respectively, while earnings-per-share estimates climbed 7% and 8%, signaling that street sentiment is stabilizing despite the near-term volatility.

The real driver of Citi's optimism, however, is the surge in capital intensity across the supply chain. Intel, TSMC, and Tesla have all raised capex guidance significantly—Intel to more than $20 billion（約3.2兆円） for 2026 (a $2 billion（約3200億円） lift), TSMC to $60–64 billion (a $4–8 billion increase) plus an extraordinary $100 billion（約16兆円） Arizona commitment, and Tesla committing to exceed $25 billion（約4兆円） in 2026 with further growth planned. These outlays are not speculative; they reflect actual demand signals from AI and U.S. onshoring policy. Citi's recommendation to favor equipment makers over chip stocks themselves is grounded in this capex acceleration: as chipmakers spend more on tools and fabs, the equipment suppliers capture margin expansion and visibility that chip stocks may not yet reflect. Amkor's $1.5 billion（約2400億円） partnership with Nvidia to expand advanced packaging capacity, backed by Nvidia's prepayment, further validates the sector's buildout momentum.

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