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Citi Research said investors should continue to own the Magnificent 7 group of mega-cap tech stocks in the S&P 500 ( SP500 ) but for a broader technology set-up suggested a barbell approach with mid-cap traditional and non-traditional tech exposure. The weight of the Magnificent 7 stocks –- Amazon ( NASDAQ: AMZN ), Alphabet ( NASDAQ: GOOG )( NASDAQ: GOOGL ), Apple ( NASDAQ: AAPL ), Meta ( NASDAQ: META ), Microsoft ( NASDAQ: MSFT ), Nvidia ( NASDAQ: NVDA ), and Tesla ( NASDAQ: TSLA ) –- in the S&P 500 ( SP500 ) makes those stocks still critical to the index’s performance, but their significant outperformance may be more in the measured going forward, Citi Research said in a note. For the other 493 stocks in the benchmark ( SP500 ), earnings expectations for 2024 are stabilizing although 2025 has not, Scott Chronert, head of Citi’s U.
S. equity strategy, said. “Still, the setup is for solid Magnificent 7 growth in 2025 with a high-single digit rate for the other 493,” he said Citi said along with investing in Mag 7, it advocates ongoing exposure with new money focused on a barbell with down cap tech names.
Citi has market weight calls on the Information Technology and Communication Services sectors. The firm screened for buy-rated, mid-cap stocks with at least 15% expected total return and positive 2024 EPS per consensus estimates. Here’s Citi’s list: The S&P 500 ( SP500 ) has risen 14.
7% YTD. Exchange-traded funds to monitor the index include ( SPY ), ( IVV ) ( VOO ), ( IVV ), ( SSO ) and ( SH ). More on the markets.
