Citi updates hardware and storage top picks into year-end

Citi updated its top picks in the North America hardware and storage and connectors and other components sector post the recent earnings results into year-end. The firm remains positive on connector and component companies, saying artificial intelligence continues to drive demand for interconnects and optical connectivity both inside and within data centers, coupled with carriers sounding more constructive on accelerating fiber deployments. Within hard disk drive, Citi believes Western Digital (WDC) remains attractively valued given the upcoming spin, cyclical demand for storage, rational capacity expansion and margin improvements. Outside of AI, demand indicators remain mixed with improving spend observed in mainstream servers and improving enterprise networking trends ahead but more tepid external storage demand, while PCs remain more sub-seasonal near term and AI PC adoption more a 2025 event, the analyst tells investors in a research note. Citi’s top picks, in order, are Dell Technologies (DELL), Corning (GLW), Western Digital, HP Enterprise (HPE) and Amphenol (APH).