Friday’s session marked the end of the first half of 2023 – and the six-month phase went down in history books.
Silicon Valley Bank and Signature Bank failed earlier in the year, which scared investors, but amid the excitement surrounding artificial intelligence, attention quickly shifted to tech stocks. All of this came amid rising tensions between the US and China, Russia’s battle with Ukraine and the Federal Reserve’s fight against inflation by raising interest rates – raising concerns about a possible recession.
“Investors have struggled with a lot so far in 2023. Weaker economic growth, persistent inflation, volatile interest rates, falling profits, stress in the banking sector, the war in Ukraine and the debt ceiling debate all weighed on sentiment. said John Lynch, chief investment officer of Comerica Wealth Management. “Yet, large-cap stocks and mega-cap tech stocks have skyrocketed, bringing some relief to investors.”
Not all stocks have performed so well. Here’s a look at the top- and bottom-performing stocks in the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 after the most recent trading session for the first half of 2023.
Best Actor
The S&P 500 and Nasdaq 100 share the same best-performing stock: Nvidia. The chipmaker (Ticker: NVDA) is up 189% this year to $423.02 in what was its best first half ever, according to Dow Jones Market Data.
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Most wins come from excitement about the future of AI. Nvidia’s chips are used to power the computers used for generative AI.
“NVDA is best positioned to transform the $1 trillion non-accelerated data center market with its full-stack artificial intelligence platform,” wrote Vivek Arya, an analyst at BofA Securities, in a June research note. He rates the stock as a “buy” with a price target of $500.
The average 12-month target price among 49 analysts covered by FactSet is $457.56.
Foreclosure
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(CRM) was the best-performing stock on the Dow for the first half of the year, rising 59% to $211.26. The cloud-based software provider, another company riding the AI wave, also posted its best first half on record.
In March, Salesforce introduced Einstein GPT to provide generative AI tools across its software business. In June, the company announced AI Cloud, customer relationship management software that combines AI with data from multiple sources “to provide trusted, open, real-time generative AI that’s enterprise-ready.”
“We estimate that AI monetization opportunities will amount to $800 billion over the next decade as the Game of Thrones battle takes place across the technology space and CRM’s pivotal move, generative AI solutions for enhanced Incorporating efficiencies across its platform puts the company in an enviable position to capitalize on the AI gold rush,” Wedbush analyst Dan Ives wrote in a June 13 research note. He rates the stock as “Outperform” with a price target of $240.
Worst Actors
Walgreen’s Boots Alliance
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(WBA), which is down 24% this year to $28.49, has fallen the most among Dow stocks. The stock is down about 9% this week alone.
This week, the pharmacy chain lowered its profit outlook for the year, saying profits in the most recent quarter were hurt by lower volumes of Covid-19 testing and vaccinations. Walgreens also warned that shoppers had become “more cautious” and wanted to spend more money on high-quality products.
Advance Auto Parts (AAP), another consumer-focused company, was the worst-performing stock on the S&P 500 for the first half of 2023. Shares of the auto retailer are down 52% this year to $70.30 each.
In May, the company reported first-quarter earnings of 72 cents per share, less than a third of the Wall Street consensus forecast of $2.56. Advance Auto Parts’ full-year earnings guidance disappointed and management cut the dividend.
“We expect the competitive dynamics we faced in the first quarter to continue, which will result in us not meeting our expectations for 2023,” said CEO Tom Greco in the company’s earnings release.
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JD.com (JD) led the losers in the Nasdaq 100. The Chinese e-commerce firm’s American depositary receipts are down 39% in 2023, marking its worst first half-year on record for the stock.
JD.com reported an increase in first-quarter earnings in May. However, the stock tumbled as traders raised concerns about a new wave of Covid-19 cases in China. These cases came after the country imposed strict lockdowns that hit both China’s and the global economy.
Investors were also concerned about the future of Chinese stocks on Friday after new data showed China’s economy is struggling.
Write to Angela Palumbo at [email protected]