The Dow Jones Industrial Average ended the year at 37,689.54 and rose 13.7% in 2023; the S&P 500 gained 24.23% to 4,769.83 this year and the Nasdaq Composite posted a yearly gain of 43.42% to 15,011.35.
Magnificent 7 stocks gained over 45% in 2023. Nvidia surged 239.02% and its market cap reached 1.22 trillion, while Meta, Tesla and Broadcom doubled.
Here’s a look at the S&P 500 top 10 market cap companies’ performance in 2023:
1. Apple
Market Cap: 2.99 Trillion
Yearly Performance: 49.01%
The much-discussed concentration risk at the very top — Apple is now nearly worth more than France’s entire stock market, it showed its best yearly performance of 49.01% gain since 2020 and the market cap rose nearly 1 trillion in 2023.
While sales have improved on the back of the release of the iPhone 15, analysts remain focused on the company's current sales cycle as well as its performance in China – a key market for the company – and whether changes in consumer trends may impact the company's bottom line going into the new year.
2. Microsoft
Market Cap: 2.79 Trillion
Yearly Performance: 58.19%
Having plowed more than $10 billion into leading AI start-up OpenAI, Microsoft is now cascading its generative AI technology across its products, notably its Bing search engine and its cloud-computing services. Both of them helped it gain 58.19% in 2023.
Oppenheimer analysts have named Microsoft their “top large-cap pick” for the coming year with a “buy” equivalent rating and a $410 per share price target. Similarly, Wells Fargo has named Microsoft its “top software pick” for 2024, and Wedbush Securities has raised its price target on Microsoft to $425 per share.
3. Alphabet
Market Cap: 1.75 Trillion
Yearly Performance: 58.32%
Thanks to its position as a leading provider of web-search services through its Google platform, Alphabet stands to benefit from AI services improving search and digital advertising results, and its latest large language model Gemini helped it add over 6 billion to its market value and gain 58.32% in 2023.
JPMorgan offered an Overweight rating and the $160 Price Target to Alphabet thanks to the company's "improving ad growth, bigger margin gains, and Gemini tightening the Gen AI gap." It expects Alphabet's gross revenue to grow 11% in 2024, driven mostly by its Google Cloud division and YouTube ads.
4. Amazon.com
Market Cap: 1.57 Trillion
Yearly Performance: 80.88%
The strength of the American consumer is one of the main reasons Amazon stock has performed “magnificently” this year, and it also has a powerful presence in the areas of cloud computing, grocery delivery and healthcare.
Wedbush analyst Scott Devitt maintained an outperform rating and the $210 price target for Amazon. He estimates Amazon's ad sales may be $46.5 billion in 2023 and will grow to $57.4 billion next year.
5. NVIDIA Corp
Market Cap: 1.22 Trillion
Yearly Performance: 239.02%
It is the first company in at least 20 years to start a year outside the S&P 500’s top 10 and rise to finish among the top five. Its valuation grew by about $860 billion thanks to AI-fueled demand for its graphics processors.
Rosenblatt analyst Hans Mosesmann maintains a buy rating on Nvidia with a price target of $1,100. He cited the company's triple-digit revenue growth, saying performance of that caliber is "unprecedented.", he also believes investors are underestimating the trend by data centers to adopt more robust processors to handle the rigors of AI and high-performance computing.
6. Meta Platforms, Inc.
Market Cap: 919.63 Billion
Yearly Performance: 194.13%
It emerged as the second-best-performing S&P 500 stock in 2023, boasting a year-to-date gain of 194.13%, its best-ever performance. Before that, Zuckerberg emphasized the management theme for 2023 as the “Year of Efficiency,” focusing on building a stronger and more nimble organization.
Citi analyst Ronald Josey named it the top pick for 2024 as online advertising is forecast to grow 12% year-over-year in 2024 in the US. Meanwhile, Meta anticipates fourth-quarter revenue of $36.5 billion to $40 billion, potentially resulting in full-year revenue of $133.04 billion (using the midpoint of guidance).
7. Tesla Motors
Market Cap: 789.9 Billion
Yearly Performance: 101.72%
After a challenging 2022, Tesla orchestrated a remarkable comeback in 2023, fueled by gradual improvements in macroeconomic conditions and a heightened investor appetite for major tech players. It will report its fourth-quarter delivery data on Jan. 2. Analysts expect a record total of roughly 475,000 units were sold, up from about 435,000 delivered in the third quarter.
Wedbush analyst Dan Ives reiterated the outperform rating and offered the price target of $350. He believes the company is poised to join the trillion-dollar club next year, defying growing Wall Street skepticism regarding electric vehicle demand.
8. Berkshire Hathaway
Market Cap: 777.46 Billion
Yearly Performance: 15.46%
It is having a disappointing finish to 2023, putting Warren Buffett's conglomerate behind the S&P 500 over the past 10 years. But it will finish what likely will be a record year for profits. After-tax operating earnings could rise more than 25% to nearly $40 billion in 2023.
The latest news is that it continues to add to Occidental Petroleum’s stake and now owns about 28% of the company.
9. Eli Lilly
Market Cap: 553.37 Billion
Yearly Performance: 60.91%
It gained 60.91% in 2023, buoyed by excitement about its GLP-1 pipeline and hopes for an Alzheimer’s treatment that its chief medical officer is “extremely optimistic” about. It focuses on Mounjaro, which mimics the effects of a gut hormone that helps control appetite and blood-sugar levels.
Goldman rates Eli Lilly with a "Neutral" rating and a $600 price target, in its most bullish scenario, assuming Eli Lilly captures 50% of the GLP-1 market, stocks could more than double to a market valuation of $1.2 trillion.
10. Broadcom
Market Cap: 522.56 Billion
Yearly Performance: 104.18%
It is actively engaging in the AI sector, collaborating with companies like Alphabet and Comcast to develop chips and infrastructure for AI applications, such as Google's custom tensor processing unit. Meanwhile, its acquisition of VMware helped it gain 104.18% in 2023.
Citigroup analyst Christopher Danely reinstated Broadcom with a Buy and a $1,100 price target. Analysts predict Broadcom's AI infrastructure sales will double from $4 billion in FY23 (11% of FY23 sales) to over $8 billion in FY24 (17% of FY24 sales).
