Citi sees at least 20% more downside for semi stocks in recession

Citi says views President Trump’s tariffs on Taiwan, South Korea, China, Vietnam, and all other imports as “convoluted and virtually impossible to assess completely” given the length and geographic diversity of the semiconductor supply chain. However, if the tariffs cause a recession, it would be negative for all semi stocks and could result in at least 20% more downside, the analyst tells investors in a research note. The firm notes that high-end analog companies such as Analog Devices (ADI) and Texas Instruments (TXN) have historically outperformed in a downturn and would expect the same to happen in a recession with Analog Devices being its top pick due to higher margins. Stocks most at risk in a recession are lower-margin companies such as On Semi (ON), Micron (MU) (Micron) and GlobalFoundries (GFS) and high multiple stocks such as Broadcom (AVGO), contends Citi.