There are no good stocks to buy in the IT hardware sector, according to top-rated technology analyst Toni Sacconaghi.
"A key question is whether investors should now look to build positions? The short answer is not yet," Sacconaghi said in a note to clients Tuesday.
In the past year, all of the listed stocks, with the exception of Dell, have lagged the broader market. Apple is down 2% in the last 12 months, while the Nasdaq is up 2%.
The S&P 500 is up nearly 4% in the past year, but Hewlett Packard Enterprises is down 10%, HP is down 24% and IBM is down 2%. These falling valuations are keeping Bernstein from buying any stocks in the embattled sector.
"While we do see plausible trades for all 5 of our stocks, we struggle to identify catalysts for some, while others aren't particularly attractive from a valuation perspective," said Sacconaghi, rated consistently the No.1 Apple analyst by Institutional Investor magazine.
The firm said the 5G cycle could be big for Apple, but visibility is low regarding the upcoming 2020 iPhone cycle. Meanwhile, the stock is expensive compared with historical levels.
"Notably, another particularly weak cycle could result in a break in the stock price akin to last year, presenting a buying opportunity," said Sacconaghi.
Bernstein said that to get positive on computer hardware company IBM, the company would need to start beating on revenues next year.
HP is inexpensive; however, "management's credibility is low, and we struggle to see any near-term catalysts," Sacconaghi added. While, Hewlett Packard Enterprises is "structurally challenged."
— With reporting from CNBC's Michael Bloom.