Investing.com -- Analysts at Citigroup are heading into the first-quarter semiconductor earnings season with a cautious overall outlook, but have added upside catalyst watches on two names, AMD (NYSE: AMD) and Analog Devices (NYSE: ADI).

Meanwhile, the bank maintained Broadcom, Nvidia, Texas Instruments, and Monolithic Power Systems as its overall top picks.

Citi expects a mixed earnings season across the sector, favoring data center chipmakers on AI and general-purpose server demand, followed by analog semiconductors amid low inventory levels and depressed margins. The Wall Street firm is most cautious on smartphone chip suppliers, where rising memory costs are expected to weigh on low-end unit demand.

On Advanced Micro Devices, Citi kept its Neutral rating but lowered its price target to $248 from $260, shifting to a sum-of-the-parts valuation framework that breaks out the company’s CPU and GPU businesses separately.

Analysts led by Atif Malik raised their 2026 earnings per share (EPS) estimate slightly to $6.38 from $6.34, citing higher CPU sales tied to agentic AI demand.

They see upside to Street estimates heading into earnings, noting that "Intel and AMD each told customers they intend to raise prices across their CPU product lines, with increases starting in March and April."

AMD has continued gaining server CPU market share, reaching 41.3% revenue share in the fourth quarter of 2025, up from 39% the prior quarter, while Intel’s share has fallen to 58.7% from 89.2% in early 2021.

“While AMD believes 2H26 is likely to be subseasonal, they remain confident that AMD’s Client business can grow driven by share gains and a continued focus on the premium segment,” the analysts wrote.

For Analog Devices, which Citi rates Buy with a $400 price target, the catalyst watch is driven by expected price increases in the analog chip market.

Supply chain discussions at a recent industry conference showed both Texas Instruments and Analog Devices raising analog prices 10–15% on higher input costs, and Citi’s April and July quarter estimates for Analog Devices already sit above the Street consensus.

Speaking more broadly, the data center segment, which accounts for 34% of semiconductor demand, remains the strongest end market, driven by AI infrastructure spending.

Citi models capital expenditure by the five largest U.S. cloud providers to grow 69% in 2026, following a 79% increase in 2025, and sees the total data center semiconductor addressable market reaching $731 billion by 2028.