Citi has named six stocks as its top picks in the software and technology sector heading into second-quarter earnings, according to a statement from the bank's analyst team.

Within data infrastructure and AI enablement, Citi favors Palantir Technologies (NYSE: PLTR), Snowflake (NYSE: SNOW), and MongoDB (NASDAQ: MDB). The bank also named Microsoft (NASDAQ: MSFT) among hyperscalers and AI infrastructure beneficiaries, and Fig and Shopify (NYSE: SHOP) within application software.

The analyst noted that spending trends are expected to improve relative to the first quarter but cautioned against characterizing the environment as a broad software recovery. "We continue to see a highly bifurcated market in which AI-related spending is benefiting a relatively concentrated group of winners," the analyst said.

The analyst added that many areas of software continue to face "elevated competitive pressure and ongoing questions around long-term business model durability."