This week’s rout in chip stocks is a buying opportunity for investors, according to Citigroup. “We think it’s time to double down on Micron as we believe the [dynamic random access memory] market will remain tight given the oligopoly,” analyst Christopher Danely wrote in a 24-page report, calling the stock Citi’s top pick. Chip stocks sold off this week amid a broader reckoning in the outperforming technology sector since mid-June. That weakness accelerated on the heels of a slack July jobs reports Friday and a surprise rate hike from the Bank of Japan that led many investors to ditch the yen carry trade, buying the yen and selling the dollar. SMH 1M mountain VanEck Semiconductor ETF over the last month Danely also blamed disappointing results from semiconductor and semiconductor equipment companies as contributing to the pullback in the sector. The VanEck Semiconductor ETF has slumped 21% over the last month. The San Francisco-based analyst added that “very high” expectations at the peak meant the PHLX Semiconductor Sector Index was trading at a 70% premium to the S & P, its highest valuation since 2008. Earnings estimates for calendar 2025 also declined 11%, due in part from 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 buy-rated names. “AI and memory still driving the bus – we’re still positive,” he wrote. “Fundamentals from the AI and memory end markets (roughly 30% of semi demand) remain robust with AI [capital expenditures] increasing and DRAM pricing already better than expected in 3Q24.”