Nvidia slips a spot among top S&P 500 stocks this year. Here's what overtook it.

MW Nvidia slips a spot among top S&P 500 stocks this year. Here's what overtook it.

By Emily Bary

Nvidia's stock now ranks third among the S&P 500's biggest gainers for 2024. It held the No. 1 spot as recently as mid-September.

Nvidia Corp. was the best performing stock in the S&P 500 as recently as Sept. 16, when its roughly monthlong reign as the index's top gainer was curtailed by Vistra Corp., which has held down the No. 1 spot every day since, according to Dow Jones Market Data.

But now Nvidia has slipped down to the No. 3 position in the wake of Palantir Technologies Inc.'s (PLTR) explosive stock rally over recent months.

With Palantir shares up nearly 23% in the wake of earnings, they've advanced 195% on the year. That's ahead of the 181% gain Nvidia shares $(NVDA)$ have posted so far in 2024 but behind Vistra's $(VST)$ 212% ascent. Palantir joined the S&P 500 SPX in September, while Vistra entered in May.

The three companies hit on the theme of artificial intelligence in different ways, with Palantir showcasing what the technology can do in the software space. The enterprise software company, which serves government and commercial clients, continues to post accelerating growth as AI has given its business a jolt.

Read: Palantir's stock soars as earnings make at least one bear rethink his view

"The growth of our business is accelerating, and our financial performance is exceeding expectations as we meet an unwavering demand for the most advanced artificial intelligence technologies from our U.S. government and commercial customers," Chief Executive Alex Karp said in Palantir's shareholder letter Monday.

Nvidia is the poster child for AI, as its graphics processing units have been the backbone of the AI revolution. While Nvidia and Palantir do different things and at different scales, Palantir has drawn some comparisons to Nvidia for the way it's derived financial benefits from AI at a time when Wall Street has a bit of skepticism about AI's potential to deliver monetary returns.

"More than any company (not named Nvidia) they have been able to capitalize on companies wanting to make progress in incorporating AI into their products, and not knowing how to do so," A D.A. Davidson analyst told MarketWatch last week.

See also: Here's what Super Micro's struggles may mean for Nvidia and Dell

But those cautious about Palantir's stock view it as expensive, and one analyst shot down Nvidia comparisons after the latest earnings.

"Another set of good results drove Palantir shares to new highs, but this was not the sort of blow-out that Nvidia has been reporting and with the shares 3x as expensive and rampant dilution, one is not getting much for one's money," wrote Richard Windsor, an independent analyst at Radio Free Mobile, who added that he "missed a double by selling early" but is "perfectly happy to have moved on to better-valued territory."

With Palantir's stock action Tuesday, the company is on track to close with a valuation back above $100 billion once again.

Nvidia is on track for a valuation milestone of its own as it looks to finish with a market capitalization above Apple Inc. $(AAPL)$ The company was on track to close Monday's session valued above Apple but failed to do so. Now, Nvidia has a $3.42 trillion market capital intraday, versus $3.36 trillion for Nvidia.

This puts Nvidia on track to be the largest U.S. company by market cap for the first time since a lone day on June 18, according to Dow Jones Market Data. The company was last valued above Apple at the end of a session on June 20.

The rallies for Nvidia and Palantir shares so far this year are noteworthy as both come in the wake of strong 2023 performances as well. Nvidia shares climbed 239% in 2023 to lead S&P 500 gainers. Palantir wasn't in the index yet but its stock rose 167% in a rebound from two calendar years of losses.

Don't miss: Nvidia's Dow nod is a plus - but this development could be an even-bigger deal

-Emily Bary

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November 05, 2024 11:58 ET (16:58 GMT)

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