(Updates story to add that Broadcom boosted its fourth-quarter outlook.)BOSTON ( TheStreet) -- Goldman Sachs ( GS) spotlights nine information-technology companies for the latest "Conviction List" for the Americas, its most promising stock picks. Tech stocks have historically been among the leaders in market rebounds. The investment banking firm's analysts see their choices with upside potential of 13% to 32% in the coming year, even though its market strategists expect a volatile, yet flat, performance by the broader market through 2013. Goldman's economic strategists have a relatively bleak outlook for 2012, calling for a little-changed S&P 500 Index and U.S. economic growth of only 1.5% as the markets continue to be whipsawed by the still-unsettled European debt crisis threatening a recession there and a slowdown here. But information-technology stocks are already on the move. The S&P 500 is down 1% this year, but IT stocks are up 2.6%, including a gain of 9.7% so far in the fourth quarter. Goldman's equity strategists recommend a 20% portfolio weighting to technology, by far the largest of any sector, with financials a distant second at 13%. The strategists say defensive sectors, including IT, "should outperform given the weak economic backdrop." S&P Capital IQ's analysts are also bullish on the information-technology industry. In the firm's 2012 outlook, it recommends an "overweight" to the sector, in part based on the premise that companies have been putting off IT spending and so "in order to maintain their profit margins and competitive positions within their sectors, (it) will require an elevated level of IT spending." S&P also said that in rebounds following "bear" or near-bear markets, which had been seen into the third quarter of this year, information-technology shares outperformed the broader market 80% of the time, with an average increase of 30% within six months of the market's bottom. Stocks bottomed out during October, when the S&P 500 dropped to 1,100. S&P IQ says of IT: "We see the sector outperforming as a challenging growth environment drives continued enterprise-level productivity improvements, which we don't think are fully reflected in very low valuations." But on a down note, Gartner, an IT research firm, just slashed its worldwide semiconductor revenue forecast for 2012 in half, citing broad uncertainty for the market due to the troubled European markets and unpredictable consumer spending. It sees sales up 2.2% in 2012, versus its earlier projected 4.6% growth. Goldman's "conviction buy" list last year had eight stocks and only one, talent-management software firm SuccessFactors ( SFSF), beat its price target. Its biggest misses were Broadcom ( BRCM), a semiconductor maker that is at $29 versus Goldman's target price of $52, and Juniper Networks ( JNPR - Get Report), trading at less than half of its $44 target. But things are looking up for Broadcom (BRCM) which today boosted its outlook for the fourth quarter, saying it expects revenue at the high end of its October projection of $1.7 billion to $1.8 billion and that its margins will be flat with the third quarter, compared with its earlier estimate for margins to be down slightly to flat. That positivity contrasts with that of fellow chip companies, many of which recently lowered their expectations, most prominently Intel Corp. (INTC) which warned Tuesday that its fourth-quarter revenue would be $1 billion below its prior estimate. Three stocks, iPad and iPhone maker Apple ( AAPL - Get Report), business-software company Oracle ( ORCL - Get Report) and telecommunications-products maker Qualcomm ( QCOM - Get Report), were on the list last year and again this year. They each are trading short of their 2011 price target -- Apple and Oracle each by about 13%, and Qualcomm by 7%. This year's picks include several stocks that show up on many "buy" lists, including credit card processor Visa ( V - Get Report) and the ubiquitous Apple, one of the world's most widely held companies. In inverse order of potential upside appreciation, here are Goldman Sachs' nine 2012 technology sector stock picks with their 12-month price targets:
9. Visa ( V - Get Report) Company Profile: Visa is the global credit card company. 2011 Return: 38% Market Cap: $51 billion Potential Upside: 13% to $110 8. NCR Corp. ( NCR - Get Report) Company Profile: NCR is the largest global vendor of ATMs and also sells point-of-sale terminals and self-service check-out systems. 2011 Return: 11% to $20 Market Cap: $2.7 billion Potential Upside: 17% to $20 7. Qualcomm ( QCOM - Get Report) Company Profile: Qualcomm makes digital wireless telecommunications products and services based on its proprietary CDMA technology. Its products are an integral part of most mobile devices. 2011 Return: 11.5% Market Cap: $93 billion Potential Upside: 17.8% to $65 6. Synchronos Technologies ( SNCR - Get Report) Company Profile: Synchronos provides transaction-management services to communications service providers. Its ConvergenceNow platform is used by most large U.S. wireless, wireline, cable, and VoIP providers to bill orders. 2011 Return: 15% Market Cap: $1.2 billion Potential Upside: 20% to $37 5. Oracle ( ORCL - Get Report) Company Profile: Oracle sells a wide range of business IT hardware and software, including databases, applications and hardware. Software licensing updates and product support account for about 42% of total revenue. 2011 Return: 1.3% Market Cap: $160 billion Potential Upside: 23% to $39 4. EMC ( EMC) Company Profile: EMC is a provider of hardware, software and services for enterprise network storage, that is increasingly focused on its software and services segments. 2011 Return: 2.8% Market Cap: $48 billion Potential Upside: 23% to $29
3. VMWare ( VMW - Get Report) Company Profile: VMWare is the world's largest virtualization-software vendor for server operating systems. EMC owns about 80% of the company. 2011 Return: 8.5% Market Cap: $12 billion Potential Upside: 29.6% to $125 2. Aeroflex Holding ( ARX) Company Profile: Aeroflex Holding is a manufacturer of radio frequency (RF) and microwave integrated circuits, components and systems used in high-performance wireless-communication systems. Aeroflex was downgraded to "underweight" from "equalweight" on Monday by Morgan Stanley (MS), which cites defense spending cuts, and lower longer-term industry spending and the low probability of it achieving its earnings guidance in the second half of next year as the reasons for the change. 2011 Return: down 35% Market Cap: $850 million Potential Upside: 31.8% to $14 1. Apple ( AAPL - Get Report) Company Profile: Apple designs consumer electronic devices, including PCs (Mac), tablets (iPad), phones (iPhone) and portable music players (iPod). Its iTunes online store is the largest music distributor in the world. 2011 Return: 22% to $520 Market Cap: $366 billion Potential Upside: 32% to $520 >>To see these stocks in action, visit the Goldman Sachs' Top Tech Stocks for 2012 portfolio on Stockpickr.