A Citigroup analyst predicts the semiconductor stock will fall another 25 percent based on these factors.
While chipmakers have enjoyed unprecedented sales over the past two years, with demand far outstripping supply, this year the semiconductor industry has suffered a long-feared reversal. After a rough few months for semiconductor stocks, one Wall Street analyst expects the pain to continue, predicting on Tuesday that "we are entering the worst semiconductor downturn in a decade."
In a note Tuesday, Citi $C Research analyst Christopher Danley wrote that this earnings season was the first since the pandemic began that consensus estimates for the chip sector have declined during earnings. While many analysts attributed the blame to cooling computer and smartphone sales at a time when the specter of recession looms over the economy, others pointed to the continued strength of the auto and industrial sectors as a reason for optimism.
Danley, however, did not see the same positives and said he believes strong sectors are showing signs of future weakness.
"We…