UBS Sees Cisco Surging

Tech stocks got a sweeping endorsement Monday from UBS's equity strategist, who upgraded the sector to buy while predicting a strong earnings season and increased IT spending.

As a sector, tech lagged the S&P last year, and this year it's tech's turn to shine, says UBS stock strategist Dave Bianco in a research note Monday.

Bianco points to IBM (IBM Quote), Cisco (CSCO Quote) and Microsoft (MSFT Quote) as some of the big beneficiaries of an upswing in the business technology spending cycle that last peaked seven years ago.

Spurring the return of corporate IT investment in part is the pending introduction of Microsoft Vista software, Bianco writes.

Companies sitting on piles of cash will now have more of a reason to beef up their networks as Vista and applications like video start putting higher demands on office data infrastructure.

"It's been seven years since the last major corporate IT capex up-cycle," Bianco writes. "The ever-increasing need to support more data traffic (especially video) with expectations of at least as fast or faster speed and [the need to] store such data has reached a crucial point."

IBM rose $1.03 to $98.45, Cisco jumped a dime to a new one-year high of $28.57, EMC (EMC Quote) was up 15 cents to $13.76 and Microsoft increased 12 cents to $29.76 in early trading Monday.