Find out which companies topped the charts on the S&P500 and why they're outpacing the others
The S&P500 otherwise known as the Standard and Poor’s 500 tracks the performance of 500 of the largest stocks listed in the United States.
It makes up more than 80% of the total value of all stocks on U.S. exchanges, and so has become the go-to barometer for the performance of US stocks.
And not only is it well known, it’s also performed pretty well in the past.
It has returned about 10% per annum since it first came into existence in 1957.
So despite being a US stock exchange, the S&P500 attracts a lot of international investors, including Aussie investors who want to partake in its gains.
Between January to July 2024, the S&P500 has already returned over 15% - but which companies are outperforming the index?
Here’s a closer look at these front runners:
Super Micro Computer is an IT company and it is one of the largest producers of high-performance servers.
It also creates software and data storage systems.
It’s quite surprising to see Super Micro Computer at the top of the S&P500 because it’s been around for decades and its share price hasn’t seen a lot of traction…. until earlier this year.
That was when it partnered up with Nvidia to use Nvidia’s computer chips in some of its data centres.
And this partnership gave Super Micro a massive mushroom power up, sending its stock up almost 150%.
Speaking of Nvidia, one of the most talked about stocks of the year, its stock price has been popping off this year.
Nvidia is one of the world’s largest producers of GPU’s - computer chips that are used for AI software and hardware and they’ve become a hot commodity as the AI industry has grown.
Earlier this year, Nvidia’s valuation surpassed the $3 trillion mark, and it’s currently ranked as the second most valuable company worldwide.
Vistra is one of the largest power companies in the US and generates energy from a number of sources like natural gas, coal, solar, and more.
As the US hosts a number of data centres, energy use has increased and it’s expected to continue increasing.
Earlier this year Vistra also acquired Energy Harbor Corporation, which added an additional 1 million customers to Vistra.
This contributed to Vistra’s 105% share price jump in the year to date.
Howmet Aerospace is an aerospace company that manufactures components for jet engines and aerospace components.
In an aerospace industry that’s still recovering post-pandemic, Howmet Aerospace reported strong financial results.
We’re talking, a 36% increase in earnings in the previous quarter, which was above investor expectations.
Howmet also increased its earnings outlook for 2024, which pleased investors.
General Electric is a conglomerate that was known for operating in the spaces of aerospace, energy, healthcare, and finance.
But back in 2021 General Electric announced a big breakup, and plans to spin off into three separate businesses, GE Aerospace, GE Healthcare, and GE Verona.
This breakup was finalised earlier this year, and the General Electric we’re looking at is now General Electric Aerospace.
The restructuring into an aerospace-only company sat well with investors, as this was considered General Electric’s “crown jewel”.
In its second quarter results, reported July 2024, General Electric’s earnings topped forecasts, with earnings jumping 67% despite the slowdown in the aerospace industry post-pandemic.
This contributed to its share price jump.
Looking at these top five performers from a distance, there are a couple of things at play:
For starters, the AI industry is having its moment - the rapid spread and uptake of AI technology has meant that companies indirectly related to the AI industry have also benefited, in particular when it comes to data centres.
The top three best performing stocks on the S&P500 have benefited from the growth of the AI industry
Secondly, some aerospace companies are coming out of the woodwork post-pandemic - and the resurgence of the industry means some stocks are growing at a rapid rate.
As an investor, it’s important to deep dive into the stocks you’re interested in investing in.
But it’s equally important to get a broader picture of the market, and what factors are impacting certain industries.
This helps us separate news from noise, and make better decisions with our own investments.
What do you think will be the top performing US stocks in the second half of this year?
Comment below
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