The S&P 500 delivered impressive returns in 2024, climbing over 20% for the second consecutive year. This strong performance reinforced investor confidence, but a closer look reveals the rally was far from evenly distributed. A handful of mega-caps were the primary drivers of these gains. Often referred to as the "Magnificent Seven Stocks," these include Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta. While their outsized contributions boosted the index, they also highlighted a growing disparity between these tech giants and the rest of the market.
Despite this imbalance, not all seven ranked among the S&P 500’s share price winners for 2024. This article takes a closer look at the year's dynamics, analyzing the ten best and worst-performing stocks within the index. By examining these extremes, we can discover trends and challenges defining the market, illuminating where investors found opportunities and where pitfalls emerged.
Among the top ten S&P 500 stocks for 2024, NVIDIA Corp (NASDAQ: NVDA) shines with remarkable growth. NVIDIA soared by 171.25%, driven by explosive demand for its AI chips deployed across sectors, including data centers and autonomous vehicles. Similarly, United Airlines Holdings Inc (NASDAQ: UAL) posted substantial gains, rising 135.34% due to strong travel demand and impressive earnings reports. Another standout, GE Vernova Inc (NYSE: GEV), achieved record orders and revenue growth after spinning off from General Electric, contributing to its 131.78% rise.
Axon Enterprise Inc (NASDAQ: AXON), formerly known solely for tasers, transformed its business and saw its share price climb 130.06% last year, reflecting the growing traction of AI-driven solutions and global expansion. This company serves public safety with innovations such as drone tracking systems, supported by significant contracts, including one with the Royal Canadian Mounted Police. Broadcom Inc (NASDAQ: AVGO), benefiting from strong demand for semiconductors, saw its shares rise 110.49% due to record revenue and remarkable AI-related growth.
Other significant performers include Targa Resources Corp (NYSE: TRGP), Howmet Aerospace Inc (NYSE: HWM), Constellation Energy Corp (NASDAQ: CEG), and Arista Networks Inc (NYSE: ANET), each posting impressive returns from 92.71% to over 102.71%, largely due to improving operational efficiencies, recovery within the aviation industry, and demand for clean energy solutions spurred by corporate agreements.
On the flip side, the year had its losers. Super Micro Computer Inc (NASDAQ: SMCI) faced severe declines, with its stock plunging 71.48%. Concerns surrounding financial reporting practices raised alarm among investors, leading to its fall. Similarly, Walgreens Boots Alliance Inc (NASDAQ: WBA) suffered 61.34% losses as demand for COVID-19 vaccines dwindled, compounded by fierce competition and operational hurdles. The performance of smaller tech giants like Intel Corp (NASDAQ: INTC) also tells a sobering story, as its stock fell 59.57% due to product issues and losing market share to competitors.
Interestingly, Palantir Technologies Inc (NYSE: PLTR) recorded the most astonishing stock growth of 394%. Yet, it was only included briefly within the S&P 500, reflecting the singsong pace at which markets can shift. During its time within the index, it achieved approximately 73%, marking it as one of the noteworthy performers albeit with limitations due to its eventual transition to NASDAQ.
The overall market dynamics for 2024 reveal the influence of the "Magnificent Seven" on the S&P 500's performance, with these companies driving significant gains. Their collective weight accentuates how even minor price fluctuations can heavily influence overall market performance. Yet, this focus on fewer stocks also signals potential risks, as market gains have become increasingly reliant on these tech behemoths.
This year, the stock market displayed strong but uneven performance, with the S&P 500 gaining 23.3%. This marked another year of impressive outcomes following the 24.2% rise noted previously. The driving force remains artificial intelligence, fuelling demand for related products and services across various industries. Clean energy and aerospace sectors have begun to gain traction, as sustainability continues to be prioritized.
Conversely, traditional retail and healthcare companies encounter mounting pressure from inflation and shifting consumer preferences. The semiconductor industry reflects mixed fortunes, underscoring the need for adaptability among established players. The increasing focus on innovation, sustainability, and recovery after the pandemic correlates with changing investor priorities.
Despite the overall positive sentiment surrounding the market, the uneven distribution of gains shines light on the risks present when relying on such narrow sets of outperformers. The lessons from 2024 suggest opportunities blooming within technological and clean energy sectors, requiring strategic awareness of market dynamics. Investors must maintain vigilance to navigate the shifting layers of performance revealed during the year.