- Nvidia and Meta among top US performers this year
- Shares in both stocks have more than doubled
- Tesla shares have also doubled in six months
Halfway through the year and it’s already easy to see who the big winners are on the S&P 500 index.
Leading the pack is the AI (artificial intelligence) ‘darling’ Nvidia (NVDA:NASDAQ) which has seen an 189% rise in its shares in the past six months, which are currently trading at $422 a pop.
The semiconductor designer is riding the wave of investor interest in all things AI-related sparked by OpenAI’s release of ChatGPT, which shows no sign of abating.
Back in February, Nvidia reported better-than-expected fourth quarter revenue of $6.05 billion and EPS (earnings per share) of $0.88.
COST-CUTTING LIFTS META SHARES
Shares in social media giant Meta (META:NASDAQ) are up 140% over the past six months, currently trading at the $288 mark.
There has been an enormous amount of change at the company in terms of strategy and headcount, which may have generated this upward trajectory.
In March this year, the Facebook and Instagram owner announced it was cutting another 10,000 jobs after saying last November it would cut 11,000 jobs from its 87,000-strong global workforce.
Founder and chief executive Mark Zuckerberg said the cuts were necessary to improve business performance, reduce costs and make the firm more efficient.
Meta has also chosen to embrace an AI strategy, showing it is adaptable and ‘moving with the times’, by creating a new generative AI model that can replicate human voices called Voicebox. However, it said it wasn’t publicly releasing the model citing the potential risks of the technology.
The company said in a statement: ‘While we believe it is important to be open with the AI community and to share our research to advance the state of the art in AI, it's also necessary to strike the right balance between openness with responsibility.’
INVESTORS OVERCOME TESLA SHARE PRICE VOLATILITY
Tesla’s (TSLA:NASDAQ) share price has been volatile this year to say the least, which is why it is even more surprising to find that its shares are up 108% so far this year.
The stock, which currently trades at $256, almost doubled at the start of the year to 15 February, then fell back sharply before posting a 137% rise.
So, what’s fuelling the share price gains? Investor optimism coupled with a run of electric vehicle (EV) charging deals with Ford (F:NYSE), General Motors (GM:NYSE) and Rivian Automotive (RIVN:NASDAQ) would seem to be the cause.
This is despite the electric vehicle maker posting a first quarter gross profit margin of 19.3% compared with expectations of 22.4%, its lowest margin since the fourth quarter of 2020.
Taking into consideration the first quarter disappointment, Tesla’s share price optimism could be slightly overdone.
ROYAL CARIBBEAN AND CARNIVAL SAIL HIGHER
Finally, cruise operators Royal Caribbean (RCL:NYSE) and Carnival (CCL:NYSE) are up nearly 100% over the past six months, benefiting from pent-up consumer demand post the pandemic.
Both companies, like the rest of the travel industry, suffered during the crisis of the last few years but like the broader industry now seem to be firmly back on track.
Royal Caribbean share are trading at $97.92, up 101% year to date, while Carnival shares are trading at $15.80, up 98% year to date.
In May, Royal Caribbean increased its full-year guidance after saying bookings were being made at higher prices and customers were spending more than expected once onboard.
The firm’s second-quarter results will be published on 2 July with analysts currently expecting $3.4 billion revenue and $431 million pre-tax profit (Q2 2022: $530 million loss).
Analysts at JP Morgan and Bank of America last week upgraded their view on Carnival highlighting that bookings across the cruise industry have reached ‘historical levels’.
Barclays analyst Brandt Montour said: ‘Given (cruise) is a vastly under-penetrated travel product, more marketing instead of price cuts drives growth in new-to-cruise, which has a reasonably high conversion rate to repeat-cruisers.’
