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Tech stocks have already performed well, and investors may be wondering if there’s more to come. For example, the iShares Global Tech ETF, which is made up of tech stocks from around the world, returned more than 50% in 2023, beating the S&P 500’s 24% return. The ETF has continued its performance this year, up nearly 5% year-to-date. Citi is overweight in information technology among cyclical sectors, but is optimistic about the sector in certain markets. China is one of them. While investors have fled the Chinese market (although stocks took a breather this week), Citi said in a recent report that additional policy support from the government could improve sentiment. China has recently eased monetary policy. In a separate 2024 Wealth Outlook report by Citi, the bank said the Chinese economy is “likely to deliver a moderate cyclical recovery” in 2024 thanks to previous policy easing. “Consumer discretion and information technology, particularly in the cutting-edge technology areas currently supported by policy,” Citi wrote. He is also bullish on non-technical artificial intelligence, saying it will bring even greater efficiencies to basic business, legal and medical services. Overall, the bank said it expects the rally in global stocks to widen further, with MSCI AC World expecting 5% upside potential by the end of the year. Investors looking for more upside in tech stocks may want to consider some tech stocks. Citi’s list of “high-conviction” stocks from markets in the US, Europe, Asia Pacific, and Latin America. This list was updated with the February 1st report. These are “high-conviction, differentiated stock recommendations to generate alpha.” Selected by bank analysts. “We have identified catalysts for outperformance and selected liquid stocks in which investors can build positions,” Citi said. Arista Networks is new to the list. Citi said it likes Arista’s positioning for its long-term exposure to the general artificial intelligence megatrend, among other factors. Referring to next-generation cloud infrastructure, the bank said, “400G cloud spending is likely to recover over the next year as hyperscaler spending on traditional data center infrastructure recovers and capital spending among top customers recovers.” I think it’s sexual,” he said. “Arista could also benefit from his early AI-related opportunities.” — CNBC’s Michael Bloom contributed to this report.
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