Momentum from a strong fourth quarter continued into 2024 as the S&P 500 posted its best first quarter since 2019, returning 10.1% through March 28 (US markets were closed on March 29 for Good Friday).
Stock markets exceeded most expectations, with many analysts and market observers predicting moderate growth, while some economists spoke of a possible recession. However, in late March, all three major stock indices posted big gains, each setting new all-time highs for the quarter.
The S&P 500 ended the quarter with a rise of 10.1%, to 5,254 points, while the Nasdaq Composite rose 9.1% in the first quarter, to 16,379 points. The Dow Jones Industrial Average gained 5.6% in the quarter to 39,807 shares, while the Russell 2000 rose 4.8% to 2,124 shares.
Let's look at some of the most profitable stocks of the first quarter.
NVIDIA is still on a roll
The best-performing stock on the Nasdaq and the second-best performer on the S&P 500 last quarter was semiconductor giant NVIDIA (NASDAQ: NVDA). NVIDIA Soared About 83% in Q1 to $903 Per Shareadding to its 239% increase in 2023. NVIDIA was boosted by excellent earnings results, as it set a revenue record with $2 billion in the fourth quarter and saw its net income rise 765% year after year.
NVIDIA's outlook for the first quarter was even better, as it expects to have another record quarter of revenue. In addition, it has launched a new chip, the Blackwell generative artificial intelligence (AI), which is the most powerful to date. NVIDIA shows no signs of slowing down and still has a reasonable PER.
However, the best large-cap stock of the quarter was Super Micro Computer (NASDAQ: SMCI), which has one big thing in common with NVIDIA: AI. While NVIDIA makes chips that are equipped to handle complex AI computing tasks, Super Micro Computer, commonly called Supermicro, builds servers that can accommodate high-performance computing and AI in data centers and for cloud computing, among other markets. .
Super Micro Computer gained a whopping 242% in the first quarter alone, trading at about $1,010 per share at the end of March. The stock got a boost from the company's earnings report, which showed its net sales had doubled year over year to $3.6 billion in the quarter ended Dec. 31. Meanwhile, Supermicro's net income rose 68% to $296 million, or $5.10 per diluted share.
Forecasts for the company's fiscal third quarter, which ends March 31, point to net sales of between $3.7 billion and $4.1 billion and diluted earnings per share of between $4.79 and $5.64, so that growth is not slowing down. Supermicro has a PER of 81 but a more reasonable PER of 33.
Disney recovers
Walt Disney Co. (NYSE: DIS) has had a tough few years, but has been the highest performing company in the Dow Jones Industrial Average in the first quarter, with a profitability of 35.4% until March 28, until reaching around $122 per share. In the quarter, Disney was boosted by its strong fourth-quarter earnings report, in which significant expense reductions lifted its earnings 49% year-over-year to $1.04 per share.
More expense reductions are expected in 2024, as Disney has targeted a 20% profit increase in fiscal 2024 and expects its struggling streaming business to be profitable by the end of the year.
Also last quarter, Disney announced the launch of a sports streaming service with Fox and Warner Bros. Discovery, which is scheduled to launch in the fall. The company also acquired a $1.5 billion stake in Epic Games, which runs the popular video game Fortnite.
Meanwhile, Disney has been dealing with a proxy fight from activist investor Nelson Peltz of Trian Fund Management. Peltz has been pushing for changes at Disney for more than a year and is trying to win a seat on the board of directors.
The results of the board vote will be announced Wednesday at Disney's annual meeting, and as of Tuesday reports indicated that Trian's candidates, including Peltz, were losing. Keep an eye on the results tomorrow as the meeting could be a catalyst for the company and its stock.
So, the first half of the year was supposed to be difficult and things would improve in the second half. Now, pending rate cuts in the second half of the year, the market could trend higher in 2024 than many experts thought.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
