These Chip Stocks Could Outperform Others in an Economic Downturn, Citi Says

Key Takeaways

Analog chipmakers Texas Instruments (

TXN

) and Analog Devices (

ADI

) could be positioned to outperform other semiconductor stocks during an economic downturn, Citi analysts said Thursday.

High-end
analog companies
have historically fared better during a downturn than other types of semiconductor firms, Citi said. Analog Devices is the bank’s “top pick,” amid concerns
sweeping new tariffs
announced by President Trump Wednesday could raise the risk of a recession.

While the impact of the Trump administration’s tariffs on the semiconductor industry is “virtually impossible to assess completely,” given the diversity and complexity of semiconductor
supply chains
, “if these tariffs cause a recession, we believe it would be negative for all semi stocks and could result in at least 20% more downside,” they said.

Shares of Analog Devices fell over 9% Thursday, while Texas Instruments fell close to 8%. Other chips stocks also tumbled, dragging the
PHLX Semiconductor Sector Index
(SOX) down nearly 10% amid a broad-based decline. (Read

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