The Philadelphia Semiconductor Index ($SOX) hit an all-time high of 13,998.14 on June 3, then quickly dropped 9.58% in one session, its sharpest fall in a while. The selloff followed Broadcom’s (AVGO) Q2 earnings report. Even though revenue jumped 48% year-over-year (YoY) to $22.2 billion, investors were not impressed.
The market wanted stronger AI guidance and more big customer wins. Because Broadcom is seen as a key signal for the chip sector, its cautious tone dragged the rest of the space lower, including Nvidia (NVDA), Advanced Micro Devices (AMD), Micron Technology (MU), Arm Holdings (ARM), and Marvell Technology (MRVL). Even after the drop, the SOX is still up 78% this year, though some had already warned that chip stocks were getting stretched.
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For investors trying to make sense of the pullback, Citigroup stepped in with a clear take: this looks like a healthy reset, not the start of a deeper decline. The firm pointed to three names as attractive right now: Broadcom, Texas Instruments (TXN), and Applied Materials (AMAT). These are not niche plays. They are among the largest and most followed companies in the space, each covering a different part of the semiconductor chain, from AI chips and analog components to the equipment used to manufacture them.
So with Citigroup making its case and the SOX coming off its worst week since early June, are these stocks now good entry points, or is this just another case of Wall Street backing names it already likes? Let’s find out.
Bullish Semiconductor Stocks #1: Broadcom (AVGO)
Broadcom is a chip and software company with a wide reach. It makes custom AI chips, networking parts, and components used in phones and broadband while also running a growing infrastructure software business.
Despite the recent dip in semiconductor stocks, AVGO stock is still up 49% over the past 52 weeks and 10% year-to-date (YTD), showing it has held up better than many peers.
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AVGO stock is not cheap. It trades at about 39.733 forward earnings, above…
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