(Bloomberg) -- The roaring rally in tech stocks has further to go, as the buzz around artificial intelligence and hopes for a pause in the Federal Reserve’s rate hikes give them an edge, according to Citigroup Inc. quantitative strategists.

The growth style investing factor in the US has by far been the most successful with a nearly 20% jump this year, as AI-driven gains boosted Nvidia Corp. to a $1 trillion market value and drove a record outperformance of tech stocks against non-tech S&P 500 companies. That aside, an unpredictable economic outlook means that US technology stocks may rise even more.

“We remain positive on Growth for June as we see more tailwinds than headwinds manifesting for this Style over the next month,” a team including Chris Montagu wrote in a note. He however warned that gains in stock market indexes were driven by fewer stocks in May, which posed a risk.

A pause in Fed rates is yet another positive for tech, according to separate note from Citi. “The potential Fed rate skip this month and cautious relative positioning in the equity market are tailwinds to growth performance as well,” the strategists said.

The Nasdaq 100’s rally since December has lifted the gauge’s 12-month forward price-to-earnings ratio to 25.7 times, above the 20.7 times average of the past decade, though below the 30.5 times reached in 2020.  These “reasonable valuations” will support growth performance going forward, the note said.

Even JPMorgan Chase & Co. strategists led by Marko Kolanovic said they are more positive on tech this year, but warned that stocks are likely to face an increasingly challenging trade off between growth and policy in the second half. For Citi, tech will win either way.

“Growth is likely to rebound further should investor sentiment improve further,” the Citi team said. “On the extreme opposite, growth may provide more downside protection in a recessionary environment since macro risk in growth is low.”

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