The tech stocks rally has reached 'euphoria' and is running out of room, Citi says

Citi analysts have downgraded the tech sector from overweight to market-weight, predicting a slowdown in the tech sector's contribution to the broader market rally. The Levkovich Index, Citi's sentiment gauge, has hit the "euphoria" level, indicating that returns later in the year will be lower. However, they indicated a modest overweight in parts of the sector, including Microsoft, while keeping semiconductor stocks at market-weight. The hardware sector, including Apple and Dell, was downgraded to underweight.

In other market news, the S&P 500 had its best start since 2019, powered by AI and the Fed. Despite a challenging first quarter, Tesla's stock continues to rise. Bitcoin is about to experience a significant 'halving' event. The AI and crypto worlds have merged to form 'Artificial Superintelligence'. Reddit's stock dropped 25% in two days due to the arrival of short-sellers.

Key takeaways

Citi analysts have downgraded the tech sector from overweight to market-weight, suggesting that returns later in the year will be lower.
Despite the downgrade, parts of the tech sector, including Microsoft, maintain a modest overweight status.
The hardware sector, including tech giants such as Apple and Dell, has been downgraded to underweight by Citi analysts.
The S&P 500 had its best start since 2019 as AI and the Fed powered stocks to new highs.

The tech stocks rally has reached 'euphoria' and is running out of room, Citi says

Key takeaways

Discussion (0)