Buy-rated and sell-rated stocks within Technology - Citi

Citi Research analysts listed their top buy-rated and sell-rated stocks within the information technology sector (NYSEARCA:XLK).

Analysts lowered their rating of the sector to market weight after downgrading the technology hardware and equipment industry group to underweight.

Regarding semiconductors and the semiconductor equipment industry, structural drivers such as artificial intelligence remain a big source of demand, but pressures on fundamentals grow, according to Strategist Scott Chronert.

Software and services remain overweight with high sales and earnings trends.

However, the technology hardware and equipment subsector has seen less significant fundamental growth drivers, and the market “seems to be pricing in an earnings growth inflection early,” Chronert said.

These are the top buy-rated stocks, ranked by their estimated total return (or ETR):

• Dynatrace Inc. (DT) - ETR: 48%
• Apple Inc. (AAPL) - ETR: 27%
• Micron Technology Inc. (MU) - ETR: 26%
• VeriSign Inc. (VRSN) - ETR: 25%
• Coherent Corp. (COHR) - ETR: 25%
• Cognizant Technology Solutions Corp. (CTSH) - ETR: 24%
• Pure Storage Inc. (PSTG) - ETR: 24%

And these are the sell-rated stocks, according to Citi:

• NXP Semiconductors NV (NXPI) - ETR: -37%
• Skyworks Solutions Inc. (SWKS) - ETR: -19%
• IPG Photonics Corp. (IPGP) - ETR: -18%
• DXC Technology Co. (DXC) - ETR: 0%

More on Technology Select Sector SPDR ETF:

• XLK: It's Tech's Time To Shine Again
• XLK May Still Have Fuel For Growth
• XLK: Ring The Cash Register, It's Starting To Get Overvalued
• XLK: S&P 500 Technology ETF underperforms in Q1; Apple, Intel, Adobe among top losers
• Computer hardware is the top Q1 industry performer but is shunned by benchmark indices