These global tech stocks are in Citi's 'high-conviction' list. One was given nearly 80% upside

Published Sun, Feb 11 20246:14 PM EST

Tech stocks already had a good run, and investors may be wondering if they still have further to go. The iShares Global Tech ETF, which comprises tech stocks around the world, for instance, had more than 50% returns in 2023, beating the S & P 500's 24%. This year, that ETF is continuing to perform with nearly 5% increase year-to-date. Citi, which has an overweight rating on information technology within the growth cyclicals segment, is optimistic on the sector in certain markets. China is one. While investors have been fleeing China markets — although stocks had a respite this week — Citi said in a recent report that additional' policy support from the government could improve sentiment. China recently eased its monetary policy. In a separate 2024 wealth outlook report by Citi, the bank said that thanks to the easing of policies so far, the Chinese economy is "likely to produce a mild cyclical recovery" in 2024." "Potential tactical investment opportunities could arise among industrials, consumer discretionary and information technology – especially in the most advanced technology areas now favored by policies," Citi wrote. It's also bullish on artificial intelligence outside of technology, saying that the efficiencies it can bring to basic business, legal and medical services will become "readily apparent sooner than many expect." Overall, the bank says that it sees more gains for global stocks, giving the MSCI AC World 5% potential upside by end of the year. Investors looking for more upside in tech can consider some tech stocks in Citi's list of top "high-conviction" picks from markets across the United States, Europe, Asia-Pacific and Latin America. The list was updated in a Feb. 1 report. These are "high conviction, differentiated stock recommendations to generate alpha" that were selected by the bank's analysts. "We identify catalysts that will trigger outperformance and chose liquid names in which investors can build positions," Citi said. Arista Networks is a new addition to the list. Citi said it likes Arista's positioning on the long-term exposure to the general artificial intelligence megatrend, among other factors. "We believe 400G cloud spend could recover into next year as hyperscaler spending on traditional data center infrastructure rebounds and a top customer's capex recovers," the bank said, referring to the next generation of cloud infrastructure. "Arista is also likely to benefit from any early AI related opportunities." — CNBC's Michael Bloom contributed to this report.