Friday’s session marked the end of the first half of 2023 — and the six-month period was one for the history books.
The failure of Silicon Valley and Signature Bank early in the year gave investors a jolt of fear, but attention quickly turned to technology stocks amid excitement around artificial intelligence. It all came amid rising tensions between the United States and China, Russia fighting Ukraine, and the Federal Reserve fighting inflation by raising interest rates – raising concerns about a potential recession.
“Investors have had a lot to contend with so far in 2023. Moderate economic growth, sustained inflation, volatile interest rates, low earnings, stress in the banking sector, the war in Ukraine and the debt ceiling debate all combined to influence sentiment,” said John Lynch, Chief Investment Officer of Comerica Wealth Management.”However, big stocks and giant tech names have jumped, providing a degree of relief to investors.”
Not all stocks have performed well. Here’s a look at the best and worst performing stocks in the Dow Jones Industrial Average
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Standard & Poor’s 500
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and the Nasdaq 100 after the last trading session for the first half of 2023.
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The S&P 500 and Nasdaq 100 Share the Same Best-Performing Stock: Nvidia
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Shares of the chip maker (Ticker: NVDA) are up 189% this year to $423.02, the best first half ever on record, according to market data from Dow Jones.
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Most of the gains stem from excitement about the future of artificial intelligence. Nvidia chips are used to power computers used in generative AI.
“NVDA is best positioned to transform the $1 trillion non-accelerated data center market with its AI platform,” Bank of America securities analyst Vivek Arya wrote in a June research note. He rates the stock as a Buy with a $500 price target.
The average 12-month price target among the 49 analysts tracked by FactSet is $457.56.
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(CRM) was the best-performing stock in the Dow for the first half of the year, as the stock jumped 59% to $211.26. The cloud-based software provider, another company riding the AI wave, also had its best first half ever.
In March, Salesforce unveiled Einstein GPT to provide generative AI tools across its software business. In June, it announced AI Cloud, a customer relationship management software that combines artificial intelligence with data from multiple sources to “deliver trusted, open, real-time AI that is enterprise-ready.”
“We estimate the monetization opportunity for AI to be $800 billion over the next decade with Game of Thrones’ battle taking place across the technology space and CRM’s key move in integrating generative AI solutions to improve efficiency across its platform puts the company in an enviable position to capitalize on AI gold rush,” Wedbush analyst Dan Ives wrote in a research note on June 13. Rating the stock as superior with a price target of $240.
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Walgreens Boots Alliance
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(WBA), which is down 24% to $28.49 this year, is the steepest decliner among Dow stocks. The stock is down about 9% this week alone.
This week, the pharmacy chain lowered its profit forecast for the year and said earnings in the most recent quarter were hurt by lower volumes of Covid-19 tests and vaccines. Walgreens also warns that shoppers are becoming “more cautious” and looking to spend more on value products.
Advance Auto Parts (AAP), another consumer-facing company, was the weakest stock in the first half of 2023 for the S&P 500. Shares of the auto products retailer are down 52% this year to $70.30 per share.
In May, the company reported first-quarter earnings of 72 cents a share, less than a third of Wall Street’s forecast of $2.56. Advance Auto Parts’ full-year earnings forecast was disappointing and management cut the dividend.
“We expect the competitive dynamics we experienced in the first quarter to continue, resulting in a shortfall in our outlook for 2023,” CEO Tom Greco said in the company’s earnings release.
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JD.com (JD) topped the losers in the Nasdaq 100. The Chinese e-commerce company’s American Depositary Receipts fell 39% in 2023, making it the stock’s worst first half ever.
JD.com reported its first-quarter earnings outperformance in May. However, the stock has been falling, with traders having concerns about a new wave of Covid-19 cases in China. These cases came after the country implemented strict lockdowns that affected the Chinese and global economies.
Investors were also worried about the outlook for Chinese stocks on Friday, after new data showed that the Chinese economy was struggling.
Write to Angela Palumbo at [email protected]
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