The Power Players - 2023's Top 10 Stocks in Review

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Topic: Industrials , Income
Publication Type: Viewpoints , Articles
The Power Players - 2023's Top 10 Stocks in Review

In 2022, the S&P 500 rebounded from its worst performance in over a decade, and it concluded 2023 with a gain of approximately 24.23% by the end of December 2023. However, the journey for investors has been marked by some turbulence. The majority of the market's gains occurred early in 2023. (Source: S&P500)

Despite apprehensions related to inflation, escalating interest rates, an unforeseen regional banking crisis, and increasing geopolitical tensions globally, the U.S. economy has proven resilient. Throughout 2023, Wall Street consistently achieved new record highs. Corporate profits are on an upward trajectory, contributing to the market's positive momentum. Notably, technology stocks regained strength in 2023, with the "Magnificent 7" mega-cap tech stocks leading the way.

As we wrap up the trading activities for 2023, attention turns to the notable winners and losers among the companies listed on the S&P 500 throughout the year. Graniteshares used stock-price data as of 29th December 2023, Friday.

  1. Nvidia Corporation (NVDA)

2023 return: 254%

Sector: Electronic Technology

Market cap: $1.117 Trillion

Nvidia Corporation (NVDA)

Source: Tradingview

As of January 10, 2023

In the realm of the AI boom, no company reaped greater rewards than Nvidia. The technology company's stock witnessed an extraordinary surge, soaring by an impressive 254%, surpassing all other contenders and securing the title of the largest percentage growth within the S&P 500 for the year. This staggering performance propelled Nvidia's market capitalization beyond the $1 trillion mark, elevating it to the prestigious position of the fifth most valuable U.S. corporation.

While the trajectory for Nvidia was predominantly upward, a notable obstacle emerged when President Joe Biden's administration implemented new regulations on exports to China in October 2023. This move posed a potential challenge to Nvidia's business operations. Undeterred, Nvidia swiftly responded to this development, recently unveiling a new chip designed to align with the export regulations. This strategic move underlines Nvidia's adaptability and commitment to navigating challenges within the evolving landscape of AI and global trade.

Additionally, In Q3 of FY24, Nvidia's revenue, surged to $18.1 billion, marking a staggering 206% increase. This remarkable growth was primarily attributed to record-breaking sales in the data center segment. The company's non-GAAP net income also witnessed an exceptional spike, soaring by 588% to $10.0 billion, with high-margin software and services contributing significantly to total revenue. The data center segment specifically recorded an outstanding 279% YoY surge, achieving sales of $14.5 billion.

  1. Meta Platforms (META)

2023 return: 117.02%

Sector: Technology

Market cap: $91.17 Trillion

Meta Platforms (META)

Source: Tradingview

As of January 10, 2023

In 2023, Meta Platforms encountered its fair share of challenges. However, these hurdles proved insufficient to impede the remarkable ascent of its stock, nearly tripling in value over the course of the year. Much like Nvidia, Meta reaped the benefits of the burgeoning field of artificial intelligence (AI). Yet, the true catalyst for the surge in enthusiasm surrounding the social media giant occurred in February when Chief Executive Officer Mark Zuckerberg declared it to be Meta's "year of efficiency," particularly in response to the adverse market reactions its shares faced in 2022.

This strategic declaration set the tone for a series of cost-cutting initiatives implemented by Meta throughout the year, aimed at enhancing operational efficiency. The success of these measures became evident in the significant upswing of Meta's stock, underscoring the impact of proactive management decisions in reshaping the company's trajectory and investor confidence.

In addition to this, after facing three consecutive quarters of declining sales the previous year, Meta experienced a significant turnaround in 2023. In the third quarter of 2023, the company recorded an impressive expansion of 23%, marking its sharpest increase in two years. This growth was primarily fueled by a rebound in digital advertising, showcasing the resilience of Meta's advertising business. Additionally, Meta gained market share over its competitors, notably Alphabet and Snap, further solidifying its position in the digital advertising landscape.

  1. Royal Caribbean Cruises Ltd. (RCL)

2023 gain: 163.4%

Market cap: $33.4 billion

Sector: Consumer Discretionary

Royal Caribbean Cruises Ltd. (RCL)


Source: Tradingview

As of January 10, 2023

Notably, Royal Caribbean has strategically invested in a joint venture, holding a 50% stake, which oversees the operations of TUI Cruises and Hapag-Lloyd Cruises. This investment positions the company to compete effectively based on factors such as innovation, ship and service quality, itinerary variety, destination choices, and competitive pricing. To enhance its strategic focus, Royal Caribbean successfully completed the divestiture of its Azamara brand in the first quarter of 2021, aligning its business portfolio for continued growth and success in the dynamic cruise industry.

Since 2020 due to COVID-19, there has been a complete shutdown of the cruise industry, and cruise stocks, including Royal Caribbean (RCL), faced a prolonged period of stagnation.

The shares of major cruise industry players, including Royal Caribbean Group (RCL), Carnival Corp. (CCL), and Norwegian Cruise Line Holdings Ltd. (NCLH), experienced significant gains in response to pent-up demand from travelers who had been confined at home due to the outbreak of the pandemic. Royal Caribbean's stock witnessed an exceptional surge, soaring over 165%, reflecting the robust enthusiasm among investors. Similarly, competitors Carnival Corp. and Norwegian Cruise Line Holdings also enjoyed substantial upticks, with stock increases of more than 132% and approximately 69%, respectively.

  1. Builders FirstSource (BLDR)

2023 gain: 157.3%

Sector: Consumer Discretionary

Market cap: $20.6 billion

Builders FirstSource (BLDR)

Source: Tradingview

As of January 10, 2023

Builders FirstSource goes beyond product provision, offering construction-related services that include professional installation and turn-key solutions. By combining quality materials with expert installation services, Builders FirstSource aims to provide a comprehensive suite of offerings for the construction industry, catering to the diverse needs of builders and contractors in the ever-evolving building and housing market.

In an unexpected twist, technology played a pivotal role in driving the growth of Builders FirstSource Inc. (BLDR), a building supplies provider. Throughout the year, the company strategically bolstered its digital investments, leveraging technology to enhance operational efficiency and customer experience. This technological emphasis was complemented by strategic acquisitions and a thoughtful adjustment of the product mix, collectively contributing to the company's robust performance.

Moreover, Builders FirstSource experienced a significant boost in its stock price following the announcement from S&P Dow Jones Indices that it would be included in the prestigious S&P 500 on December 18th. This recognition not only underscored the company's financial strength and market relevance but also served as a testament to the impact of its technological initiatives, acquisitions, and product strategies in positioning itself as a key player in the building supplies industry.

  1. Uber Technologies Inc. (UBER)

2023 gain: 148.2%

Sector: Technology

Market cap: $126.3 billion

Uber Technologies Inc. (UBER)

Source: Tradingview

As of January 10, 2023

Similar to the cruise lines, Uber experienced a significant upturn with the easing of COVID-19 restrictions and the subsequent reopenings. The ride-hailing service, alongside Builders FirstSource, saw additional gains when it was added to the S&P 500 on December 18. This inclusion contributed to the stock's impressive performance, witnessing an approximate 142% increase for 2023. Uber's resurgence aligns with the broader trend of industries rebounding post-pandemic, reflecting the company's adaptability and resilience in navigating changing market dynamics.

  1. Carnival Corporation (CCL)

2023 gain: 132.9%

Sector: Consumer Discretionary

Market cap: $23.8 billion

Carnival Corporation (CCL)

Source: Tradingview

As of January 10, 2023

Carnival Corp., a prominent global cruise line operator, showcased impressive financial resilience in Q3 2023, reporting a net income of $1.07 billion. This marked a significant rebound from the previous quarter's loss of $407 million, signaling a robust return to profitability. The company's share price experienced notable fluctuations influenced by factors such as seasonality, market sentiments, and global events.

Moreover, Carnival made substantial strides in debt reduction, trimming nearly $4 billion from its peak in Q1 2023. Despite this reduction, the company forecasts closing the year with under $31 billion in debt. Carnival's strategic efforts also fortified its liquidity reserve, reaching $5.7 billion by the end of Q3, underscoring its proactive stance in maintaining strong financial health.

  1. Advanced Micro Devices, Inc. (AMD)

2023 gain: 128.2%

Sector: Technology

Market cap: $238.8 billion

Advanced Micro Devices, Inc. (AMD)

Source: Tradingview

As of January 10, 2023

AMD executed a remarkable turnaround since hitting a low point in 2015, leveraging new products and improved profitability. Over the next six years, AMD's stock experienced a substantial upward trajectory.

In Q3, AMD achieved significant market share gains from Intel in both PC and server CPUs. The company's share of desktop PC processor sales rose from 13.9% to 19.2%, while notebook PC processor sales increased from 15.7% to 19.5% YoY. In the lucrative server CPU market, AMD's unit share surged from 17.5% to 23.3% over the same period.

AMD's recent advancements in its Instinct Platform include the MI300X GPU, MI300A APU, and associated ROCm software stack. The MI300X, based on AMD's CDNA3 architecture, delivers notable improvements, boasting 40% more compute units, 1.5x more memory capacity, and 1.7x more peak theoretical memory bandwidth than its predecessor, the MI250X. These enhancements position the MI300X as a leading GPU for demanding workloads, simplifying configurations, and potentially establishing AMD as a strong competitor in the AI GPU market.

The MI300A, also based on CDNA3, integrates GPU cores with Zen4 CPU cores and 128 GB of HBM3 memory in a single package, showcasing a significant 1.9x performance-per-watt improvement for FP32 HPC and AI workloads compared to the previous generation MI250A.

Additionally, AMD's ROCm 6 platform, emphasizing an open-source approach, promises an 8x AI performance increase on the MI300 hardware compared to the previous generation software. The release adds support for key generative AI features, further solidifying AMD's position as an innovative force in the high-performance computing and AI markets.

  1. PulteGroup, Inc. (PHM)

2023 gain: 126.7%

Sector: Consumer Discretionary

Market cap: $22.3 billion

PulteGroup, Inc. (PHM)

Source: Tradingview

As of January 10, 2023

PulteGroup reported a robust performance in Q3, with a net income of $639 million, marking an increase of 8% compared to the prior year period. Earnings Per Share (EPS) stood at $2.90. Home sale revenues for the quarter were up by 3% YoY, reaching $3.9 billion, while the home sale gross margin remained strong at 29.5%. Noteworthy growth was seen in net new orders, surging by 43% to 7,065 homes valued at $3.8 billion. The unit backlog was substantial, totaling 13,547 homes with an estimated value of $8.1 billion.

In addition to operational successes, PulteGroup demonstrated prudent financial management by repurchasing $300 million of common shares and retiring $65 million of senior notes during the quarter. These strategic moves contributed to reducing the debt-to-capital ratio to 16.5% while achieving a net debt-to-capital ratio of 1%. The company's robust financial position also includes a substantial cash balance of $1.9 billion.

  1. Palo Alto Networks, Inc. (PANW)

2023 gain: 110.5%

Sector: Technology

Market cap: $92.6 billion

Palo Alto Networks, Inc. (PANW)

Source: Tradingview

As of January 10, 2023

As of November 15, 2023, Palo Alto Networks disclosed remarkable year-over-year revenue growth, surging by 20% to reach $1.9 billion, compared to $1.6 billion in the Q1 FY23. The company's GAAP net income saw a substantial increase to $194.2 million, or $0.56 per diluted share, a notable improvement from the $20.0 million, or $0.06 per diluted share, reported in the corresponding period last year.

Palo Alto Networks's operating margin and net income per share for the quarter were ahead of the company's guidance prompting them to revise its full-year fiscal 2024 guidance for both metrics. Anticipating a strong performance in Q2 FY24, the company projects total billings between $2.335 billion and $2.385 billion, revenue between $1.955 billion and $1.985 billion, and diluted non-GAAP net income per share in the range of $1.29 to $1.31. Palo Alto Networks' robust financial results and optimistic outlook underscore its position as a key player in the cybersecurity industry.

  1. Tesla, Inc. (TSLA)

Market cap: $790.9 billion

Sector: Consumer Discretionary

2023 gain: 102.0%

After hitting a low point in 2022 around $100 per share, Tesla has experienced a robust resurgence throughout 2023. The stock's value more than doubled during the year, witnessing a remarkable 108% increase.

Tesla, Inc. (TSLA)

Source: Tradingview

As of January 10, 2023

In an aggressive move to remain competitive, the Austin-based carmaker, Tesla, has been consistently slashing prices since last year. However, this strategy has come at the cost of the company's margins. In Q3FY23, Tesla's total operating margins recorded a significant decline, standing at 7.6%. This is notably lower compared to the same quarter last year when the operating margins were at a healthier 17.2%. The impact on margins reflects the trade-off between pricing strategies and maintaining profitability as Tesla navigates a dynamic and competitive market landscape.

Additionally, Tesla reported a total revenue of $23.35 billion compared to $21.454 billion up by 9% YoY. The rise was led by price cuts and growth in automotive deliveries. Tesla reported a GAAP (adjusted) net income of $2.3 billion in the quarter, or 66 cents a share, down 37% from a year earlier and the smallest profits it reported in two years. (Source: Graniteshares)

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This blog does not constitute an offer to buy or sell or a solicitation of an offer to buy securities in any company. Nothing contained herein constitutes investment, legal, tax or other advice nor is to be relied upon in making an investment or other decision. No recommendation is made positive or otherwise, regarding individual securities or investments mentioned herein. Any summary list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in a particular investment. Prospective clients must consult with their own legal, tax and financial advisers before deciding to invest. This email contains the opinions of the author and such opinions are subject to change without notice. The source of data is GraniteShares unless otherwise stated. No guarantee is made to the accuracy of the information provided which has been obtained from sources believed to be reliable. This email and the information contained herein is intended only for the use of persons (or entities they represent) to whom it has been provided. Past performance is not a reliable indicator of future results.  The value of an investment may go down as well as up and can result in losses, up to and including a total loss of the amount initially invested. Investments may involve numerous risks including, among others, company risks, general market risks, credit risks, foreign exchange risks, interest rate risks, geopolitical risks and liquidity risks.  Please note that GraniteShares short and leveraged Exchange Traded Products are for sophisticated investors.

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