To The Moon

Citigroup ( C ) strategists raised their ratings on U.S. stocks to neutral and put an overweight rating on technology stocks, citing booming demand for artificial intelligence (AI) and the expected end of the Federal Reserve's rate hike cycle.

Citi's global strategy and macro team said on Friday, "Given that AI has not advanced to the point where it will disappoint, it may continue to be a driving force. Since AI is mainly the subject of hype in U.S. mega-cap stocks, this should also reduce The risk of U.S. equities underperforming."

Dirk Willer, strategist at Citigroup's global asset allocation team, and others said in a report that once the Fed ends its tightening cycle, the investment theme of artificial intelligence (AI) will help U.S. stock technology stocks, as well as the overall U.S. stock market outperform other countries and regional stock market.

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Their report came after shares of $NVIDIA Corp(NVDA)$ hit new highs on Thursday. The chipmaker previously said the AI boom had driven its record sales. Other chipmakers tied to the AI boom, such as $Advanced Micro Devices(AMD)$ and $Taiwan Semiconductor Manufacturing(TSM)$ , also rose along with tech stocks.

Citigroup upgraded its rating on Asia ex-China to overweight, citing the concentration of high-tech stocks in Taiwan and South Korea's stock indexes.

Citi economists also said the market is pricing in a 30 percent chance the Fed will raise rates again at its June meeting.

They said: "Given the banking crisis and the likely avoidance of a debt-ceiling crisis, markets have priced out multiple rate cuts by the Fed later this year, with market trends suggesting the Fed is (almost) done interest."

Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management, said in a phone interview yesterday that his recent view that

the $S&P 500(.SPX)$ ill peak around 4,200 in December is now too low, as the market looks to Expectations of earnings recovery in 2024 and investors' "fear of missing out on investment opportunities (FOMO)" mentality began to emerge, and the US benchmark $S&P 500(.SPX)$ index may rebound to 4,600 points by the end of this year.

"Wall Street's most accurate analyst" Hartnett's colleague, Savita Subramanian, an equity strategist from Bank of America, also raised her year-end target price for the $S&P 500(.SPX)$ from 4,000 to 4,300, with a range of 3,900-4,600