Artificial Intelligence Stocks Performance

Bespoke Investment Group has revealed that it's not only the top seven companies in the S&P 500 benefiting from the current stock-market craze surrounding artificial intelligence.

AI Stocks Outperforming

Since the end of November 2022, sixty-seven stocks related to AI in the S&P 500 have surged by an average of 45.3%. This surge occurred around the time the first iteration of ChatGPT was released to the public, according to Bespoke. In contrast, the remaining 433 non-AI stocks in the index have only seen a 9.2% increase over the same period.

Nvidia Corp. Making Waves

Nvidia Corp. (NVDA), a prominent chip maker, is one of the companies that has greatly benefited from investor excitement about AI. The company, with a market value of approximately $1.8 trillion, is among the top weights in the S&P 500. Nvidia is set to release its fourth-quarter earnings results after the U.S. stock market closes on Wednesday.

Continued Attention on AI Stocks

Bespoke noted that AI stocks continue to capture most of the investment world's attention. Year to date, the average S&P 500 AI stock has seen a 3.7% increase, significantly higher than the 1.1% gain for non-AI stocks in the index.

Nvidia's Performance

Despite a 6% drop in Nvidia's shares on Tuesday, the stock has still surged by over 37% this year, as per FactSet data. The S&P 500's technology sector, which includes Nvidia, has also seen an increase of more than 5% in 2024 up to Tuesday afternoon's trading.

Tech Stocks Outperform S&P 500 in 2024

Shares of the Roundhill Magnificent Seven ETF, including tech giants like Microsoft, Apple, Nvidia, Amazon, Meta Platforms, Alphabet, and Tesla, have seen an 8% increase so far this year, as per FactSet data. Comparatively, the S&P 500 has only managed to rise by around 4% in 2024.

Top Performers and AI Giants

Among the "Magnificent Seven" stocks, Nvidia has shown significant gains this year, while Apple and Tesla are in the negative territory. Other notable large-cap AI stocks beyond the main seven include Advanced Micro Devices, ServiceNow, Broadcom, Intuitive Surgical, Salesforce, and Intel. Despite Intel's decline, the remaining six have surpassed the S&P 500's performance in 2024.

Market Movement

On Friday, AI-related stocks in the S&P 500 experienced a slight downturn of 1.3%, compared to a 0.3% slip in non-AI stocks. This followed a weekend celebrating Presidents Day, with U.S. stock decline observed on Tuesday. The S&P 500 fell by 0.8%, the Dow Jones Industrial Average reduced by 0.2%, and the Nasdaq Composite dropped by 1.3%, according to FactSet data.

Impact of Interest Rates on AI Stocks

Explore the potential impact of higher interest rates on the AI stock market bubble in BofA's latest analysis.