In the dynamic landscape of the S&P 500, a notable shift in the leading stocks has emerged, with Super Micro Computer (SMCI) taking the spotlight, outpacing even the juggernaut Nvidia (NVDA) in terms of stock performance. While Nvidia has been commanding attention with an impressive nearly doubled price surge, Super Micro Computer has surpassed expectations by more than tripling its value since the beginning of the year, following its recent inclusion in the S&P 500 index.
Joining Super Micro in the top ranks of performers are Constellation Energy (CEG), Meta Platforms (META), and Deckers Outdoor (DECK), the latter being a fresh addition to the S&P 500 roster.
The dominance of Nvidia and its partner Super Micro in the realm of artificial intelligence (AI) investments is evident, further bolstered by Meta Platforms’ association with the AI sector. However, even Constellation Energy, primarily an electric utility company, finds itself tangentially linked to AI ventures due to the substantial power demands of data centers fueling AI operations.
Conversely, Tesla (TSLA) and aerospace giant Boeing (BA) find themselves at the opposite end of the spectrum, emerging as the S&P 500’s notable underperformers for the year.
Despite these individual fluctuations, the S&P 500 as a whole has seen a commendable uptick of 9.7% in 2024, reaching unprecedented highs just last week.
Super Micro Stock Surges Ahead
Super Micro Computer’s stock has experienced a remarkable surge, boasting a staggering 242.2% increase in value for 2024. The rally commenced on January 19 when the AI server manufacturer released robust preliminary results, propelling its shares to new heights. This momentum continued unabated following the announcement of complete results and bullish guidance later in the month.
While a temporary plateau was observed on February 16, the stock swiftly rebounded, buoyed by positive developments in Nvidia’s earnings. The announcement of Super Micro’s inclusion in the S&P 500 further catalyzed the stock’s ascent to fresh record highs in early March, despite a subsequent minor setback attributed to losses from a new share offering.
Super Micro’s core business involves manufacturing servers tailored for AI chips, serving as a vital component in the burgeoning AI infrastructure alongside industry leaders like Nvidia.
Nvidia Continues to Ascend
Nvidia, renowned for its prowess in AI chip technology, has also witnessed a meteoric rise in its stock value, surging by 90.4% in 2024. The rally commenced in early January, marked by a breakout from a flat base, and has since persisted unabated, with Nvidia stock rallying for 11 consecutive weeks. Though a temporary dip was observed on March 8, the stock swiftly recovered, closing the week with a remarkable 7.35% gain.
Constellation Energy and Meta Platforms in the Mix
Constellation Energy’s stock has soared by 52.5% in 2024, propelled by robust Q4 results and bullish 2024 EPS guidance. Despite its primary focus on electric utilities, the company finds itself indirectly linked to AI ventures due to the substantial power requirements of data centers, aligning its trajectory with the surging AI sector.
Meta Platforms, formerly known as Facebook, has rallied by 44% this year, driven by robust financial performance and shareholder-friendly initiatives such as buybacks and dividends.
Deckers Outdoor Steps Up
Deckers Outdoor, a specialist in footwear, has witnessed a commendable 38% surge in its stock value in 2024. Despite a minor setback attributed to weak guidance from Nike, the company’s inclusion in the S&P 500 index has bolstered investor confidence.
S&P 500 Losers: Tesla and Boeing
In contrast, Tesla’s stock performance has been lackluster, witnessing a decline of 31.25% in 2024, making it the worst performer in the S&P 500. The company faces ongoing challenges, including persistent earnings estimate downgrades and anticipated delivery shortfalls in the first quarter.
Similarly, Boeing has experienced a decline of 27.55% in 2024, exacerbated by safety concerns following an in-flight incident in January. These challenges could have long-term ramifications, potentially leading to a shift in market share towards competitors like Airbus.
While individual stocks experience fluctuations, the broader market sentiment remains positive, reflected in the overall uptick of the S&P 500, signaling resilience and optimism among investors amidst evolving market dynamics.
