By Angela Palumbo and Emily Dattilo
Stock markets have recorded a strong first quarter, with the Dow Jones Industrial Average gaining 5.5%, the S&P 500 rising 10%, and the Nasdaq 100 increasing 8.6%. The moves have in part been driven by the ongoing artificial-intelligence frenzy. One AI stock really has shined in the first three months of the year.
These stocks were the best performing and worst performing in the first quarter of 2024.
Dow Jones Industrial Average
Walt Disney was the top performer stock in the blue chip index in the first quarter, rising 34%. The gain was the largest quarter-to-date increase for the stock since December 2020.
Disney has had a rocky couple of years as the entertainment giant experienced issues like high streaming costs, weakened box office performances, and the shift away from traditional, linear TV. Investors have called for internal change, and now the House of Mouse is in the middle of a board fight with activists including Trian Group's Nelson Peltz.
But the company, which was a Barron's stock pick in July 2023, has shown signs of strength in recent months, helping to push the stock higher. Disney reported better-than-expected profit for its December quarter and provided earnings guidance above analysts' estimates. Earlier this month, CEO Bob Iger said Disney was on track to beat its 2024 free cash flow guidance and was working to lower costs.
Boeing was the worst performer in the Dow during the first quarter. The shares have tumbled 26%, notching their worst quarter since June 2022.
It's been a turbulent few months for the airplane maker, to say the least. After an emergency door plug blew out of a 737 MAX 9 operated by Alaska Air inflight, eyebrows were raised over the quality of Boeing's manufacturing procedures, and the Federal Aviation Administration tightened regulations.
Despite the list of challenges, however, Wall Street remains positive, with 66% of analysts covering the company rating shares at Buy, according to FactSet.
Boeing CEO Dave Calhoun, meanwhile, announced earlier this week that he was stepping down at the end of 2024.
S&P 500
Super Micro Computer has started its first quarter in the S&P 500 with a bang. Shares of the server maker have jumped 260% this year as investors continue to bet on the future of generative artificial intelligence. Super Micro joined the S&P 500 on March 18.
Some analysts have argued that AI hype already has been priced into the shares, but J.P. Morgan's Samik Chatterjee initiated coverage of the stock with an Overweight rating and a $1,150 price target on Monday.
"We expect the leadership to continue, led by a balance of custom built solutions and fast time to market, although potential upside is more likely from rapid expansion in the AI Server market rather than expansion of the already premium valuation multiple," Chatterjee wrote.
Tesla was the worst performer in the S&P 500 in the first quarter, with shares dropping 28%, their worst quarter since December 2022. The electric-vehicle maker has struggled with competition and slowing demand.
In January, Tesla reported worse-than-expected earnings and management said automotive sales growth in 2024 would be substantially below last year. Then, earlier this month, Bloomberg reported the company was cutting production at its Shanghai plant to five days a week from six-and-a-half days, likely illustrating a downturn in demand.
Nasdaq 100
Nvidia continues to shine, and was the best-performing stock in the Nasdaq 100 in the first quarter after gaining 82%.
The stock jumped 16% alone on Feb. 22, after the chip maker reported earnings and revenue above Wall Street's consensus and provided a strong revenue outlook.
Nvidia stock has been one of, if not the No. 1 beneficiary of investor enthusiasm over generative AI. The company makes chips that help power the hot tech for many major companies like Meta Platforms and Amazon.com.
Sirius XM Holdings was the worst performer in the Nasdaq 100 this quarter, falling 29%.
Sirius XM is expected to close its merger with Liberty Sirius XM in the third quarter, and Warren Buffet has been buying the tracking stock.
Write to Angela Palumbo at angela.palumbo@dowjones.com and Emily Dattilo at emily.dattilo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 28, 2024 11:49 ET (15:49 GMT)
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