By Benjamin Pimentel

The tech sector rally gained momentum Monday, as Cisco Systems Inc. posted strong gains after Barclays Capital upgraded the networking giant to overweight.

Cisco (CSCO) shares jumped more than 5% after analyst Jeff Kvaal raised the company's rating, saying, "We expect improving carrier demand, a better Europe, and continued U.S. momentum to drive revenue upside."

Shares of Applied Materials (AMAT) also gained more than 3% after the chip tools maker was upgraded to buy by Citigroup.

Meanwhile, shares of Affiliated Computer Systems (ACS) soared more than 13% after Xerox Corp. (XRX) announced a plan to buy the information-technology services company for $6.4 billion.

Shares of Xerox plunged more than 15%.

Overall, the sector advanced on gains from Cisco and other major networking gear makers, including Juniper Networks (JNPR) and Brocade Communications (BRCD).

The Nasdaq Composite Index (RIXF) added about 2%, rising to 2,133, while the Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia Semiconductor Index (SOX) each rose about 2.4%.

Other major tech players were in positive territory, including Google Inc. (GOOG), Apple Inc. (AAPL) and Microsoft Corp. (MSFT).

Meanwhile, Research In Motion (RIMM) was down about 2.7%.