Citi Cuts Tech to Market Weight as S&P 500 Heads for 13% Q2 Gain
Updated
Updated · CNBC · Jun 26
Citi Cuts Tech to Market Weight as S&P 500 Heads for 13% Q2 Gain
3 articles · Updated · CNBC · Jun 26
Summary
Citi downgraded its tech stance to market weight from overweight, arguing AI and tech winners are becoming harder to identify even as semiconductor earnings momentum remains strong.
Scott Chronert said the near-term problem is valuation strength worsening the return-on-investment debate around AI-related capital spending, making it difficult to see every company in the trade benefiting.
Tech shares already showed strain Friday after a report that OpenAI may delay its IPO until next year; Nvidia fell about 1%, Micron dropped roughly 4%, and the VanEck Semiconductor ETF slid 3%.
Citi still remains bullish on equities overall, with Chronert keeping an 8,100 year-end S&P 500 target while expecting leadership to broaden beyond tech as weaker oil prices ease inflation concerns in Q3.