Earnings will be strong this year supported by secular economic trends, says Citi's Drew Pettit
Speakers
Summary
Drew Pettit, Citi U.S. equity strategist, discusses a strong earnings year supported by secular trends, highlights semiconductors as a real growth story driven by AI and supply constraints, and advises caution on defense stocks due to pricing power issues. The interview covers specific stocks but focuses on sector-level themes.
- Drew Pettit expects strong earnings year supported by secular trends.
- He views semiconductors as a real growth story driven by AI build-out and supply constraints.
- He distinguishes semiconductors from cyclical stocks, citing hyperscaler buyers.
- He advises caution on defense stocks due to inability to pass through costs.
- He prefers industrials that can pass through costs and maintain margins.
- The interview covers various stocks including NVIDIA, Micron, Palantir, etc., but no specific investment theses beyond semis and defense.
Trade Ideas
Semiconductors are a growth story with supply constraints.
The semiconductor story is real due to AI build-out, supply constraints, margin expansion, sales growth outpacing assets, and markets rotating to supply-constrained areas. It is a growth story, not cyclical, with hyperscaler buyers providing stability.
Defense names cannot pass through costs.
Defense names have priced in a lot of expected growth and cannot pass through cost increases because their buyer (government) has power, making the sector unattractive.
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This CNBC video, published April 24, 2026, features Drew Pettit discussing SMH, ITA. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Drew Pettit · Tickers: SMH, ITA