It’s not just the leading seven companies in the S&P 500 that are reaping the rewards of the stock-market frenzy surrounding artificial intelligence, as per Bespoke Investment Group.
According to Bespoke, sixty-seven stocks within the S&P 500 associated with AI have experienced a significant surge, averaging 45.3% growth since the conclusion of November 2022, coinciding with the initial release of ChatGPT to the public. In contrast, the remaining 433 non-AI stocks in the S&P 500 have only seen a modest 9.2% increase during the same period.
Nvidia Corp. (NVDA), a prominent chip manufacturer closely linked to AI advancements, is set to announce its fourth-quarter earnings post the close of the U.S. stock market on Wednesday. With a substantial market capitalization of approximately $1.8 trillion, Nvidia stands as one of the primary influencers in the S&P 500, which was primarily driven by a cluster of seven large-cap tech stocks last year.
Bespoke noted, “AI-related stocks continue to dominate the focus of the investment community,” highlighting that year-to-date, AI-related stocks within the S&P 500 have outperformed non-AI stocks, boasting a 3.7% increase compared to a mere 1.1% gain for non-AI stocks.
Shares of Nvidia experienced a decline of around 6% on Tuesday afternoon; however, despite this setback, the stock has surged by over 37% since the beginning of the year, based on FactSet data.
The technology sector of the S&P 500, inclusive of Nvidia, has seen an uptick of more than 5% thus far in 2024, as per Tuesday afternoon’s trading data.
Additionally, the Roundhill Magnificent Seven ETF (MAGS), encompassing major holdings like Microsoft Corp., Apple Inc., Nvidia, Amazon.com Inc., Meta Platforms Inc., Alphabet Inc., and Tesla Inc., has recorded an almost 8% increase year-to-date, as per FactSet data.
While five of the “Magnificent Seven” stocks have shown positive growth this year, Nvidia has emerged as the top performer. Conversely, Apple and Tesla have observed a decline in 2024.
Apart from the primary tech giants, other noteworthy large-cap AI stocks include Advanced Micro Devices Inc., ServiceNow Inc., Broadcom Inc., Intuitive Surgical Inc., Salesforce Inc., and Intel Corp., as highlighted by Bespoke. Despite Intel’s decline this year, the remaining stocks have surpassed the performance of the S&P 500 in 2024.
In a recent observation by Bespoke, the 67 AI-related stocks within the S&P 500 experienced a slight setback, declining by an average of 1.3%, while the non-AI stocks only slipped by 0.3%.
As U.S. stocks saw a decline on Tuesday following the Presidents Day holiday weekend, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite were down by 0.8%, 0.2%, and 1.3% respectively, according to FactSet data.
