Citi Highlights AI Infrastructure, Copper Exposure, and High-Yield Credit as Holiday-Season Investment Plays

Citi has issued a set of targeted investment recommendations for the December period, emphasizing three high-conviction themes: AI-driven infrastructure, copper supply dynamics, and high-yield credit spreads. The firm sees strong tailwinds in semiconductor capital expenditure, with global AI server spending projected to reach $210 billion in 2025—a 35% increase from 2024—driving demand for specialized chips and power systems. Within the materials space, Citi highlights copper as a critical input for AI data centers and renewable energy grids, forecasting a structural deficit of 1.8 million metric tons by 2026. This imbalance is expected to support a sustained price rally, with base metal benchmarks projected to trade above $11,000 per metric ton in the coming months. The firm recommends exposure through miners with low-cost, scalable operations, including Freeport-McMoRan (FCX) and Southern Copper (SCCO). In fixed income, Citi favors high-yield corporate bonds with maturities between 2027 and 2029, particularly in the energy and industrial sectors. These bonds currently offer yields averaging 8.7%, significantly above the 10-year Treasury rate of 4.1%, positioning them as attractive risk-adjusted returns as credit spreads remain narrow. The firm notes that default rates in the BBB-rated cohort are projected to remain below 2.5% through Q1 2026. The recommendations reflect a broader strategy of tilting toward cyclical assets with strong earnings visibility and structural demand shifts, especially as corporate capital allocation continues to favor technology and infrastructure development. These positions are expected to benefit from both seasonal liquidity and macroeconomic stability in the final quarter.