Sometimes, it makes sense to bottom-fish for value stocks. Yet, looking ahead to the new year, investors might consider 2023’s best-performing stocks. After all, whether it’s irrational or not, big companies can get even bigger, and momentum stocks could continue to be huge winners in 2024.
There’s nothing wrong with small caps and over-the-counter (OTC) stocks, but I chose to apply a “go big or go home” standard to this top-performing stocks list. Consequently, I stuck to companies in the S&P 500 Index (SPX). As it turns out, the best performers of the year happen to be large- and mega-cap technology stocks.
They’re not all “Magnificent Seven” stocks, though, so be ready for some famous names but also some surprises. With the “bigger is better” principle in mind, here are the four top performers of 2023, all of which have rally-continuation potential: Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), Palo Alto Networks (NASDAQ:PANW), and Advanced Micro Devices (NASDAQ:AMD).
Nvidia (NASDAQ:NVDA)
If any theme dominated 2023, it was artificial intelligence (AI). Investors quickly figured out that there was a picks-and-shovels trade with Nvidia stock since generative AI applications are power-intensive, and Nvidia manufactures powerful AI processors that a wide range of technology companies can use.
As we’ll discuss in a moment, analysts are mostly bullish on Nvidia for the next 12 months. That’s understandable since Nvidia has been beating Wall Street’s quarterly consensus EPS estimates all year long.
Can NVDA stock possibly move higher after this year’s 250% rally? Bank of America (NYSE:BAC) analysts seem to think so, as they assigned a Buy rating and a $700 price target to Nvidia shares. They feel that it’s “early to predict a peak” in generative AI investments, so perhaps Nvidia can continue to grow along with this headline-grabbing technology market segment.
What is the Price Target for NVDA Stock?
On TipRanks, NVDA stock comes in as a Strong Buy based on 31 Buys and three Hold ratings in the past three months. The average Nvidia stock price target is $661.35, implying 33.3% upside potential.
Meta Platforms (NASDAQ:META)
A few years ago, Meta Platforms CEO Mark Zuckerberg went all in on the Metaverse and virtual reality (VR). Now, however, Meta Platforms is dealing with a decline in the VR market as well as pushback from some lawmakers.
Nevertheless, Meta Platforms is thriving in 2023 because the company is a social media juggernaut. Along with the ever-popular Instagram, Facebook, and WhatsApp, Meta Platforms has the relatively new Threads micro-posting app, which is now expanding to European countries.
Besides, META stock’s 181% year-to-date gain is nothing to sneeze at. If Meta Platforms can continue its streak of quarterly EPS estimate beats into the new year, investors might count on Meta Platforms to keep on delivering superior results and share-price gains.
What is the Price Target for META Stock?
META is a Strong Buy, according to analysts, based on 36 Buys and one Hold rating in the past three months. The average Meta Platforms price target is $387.35, implying 10.6% upside potential.
Palo Alto Networks (NASDAQ:PANW)
The first two picks on this list were “Magnificent Seven” stocks, but the next two aren’t. Indeed, this next huge 2023 gainer will probably surprise you: Palo Alto Networks stock. The cybersecurity software specialist is a favorite among analysts and has an absolutely stellar earnings-beat track record.
An IBM (NYSE:IBM) report estimated that the “global average cost of a data breach in 2023 was $4.45 million.” That’s a compelling reason for businesses to turn to Palo Alto Networks for cybersecurity software and services in 2024. With this in mind, analyst firms like Susquehanna and Mizuho are bullish on the cybersecurity market and on Palo Alto Networks as a major player in that field.
Thus, Susquehanna initiated its coverage of Palo Alto Networks stock with a Positive (Buy-equivalent) rating and a price target of $400, while Mizuho reiterated its Buy rating and hiked its price target on the shares from $280 to $325. It seems entirely possible, then, that PANW stock can maintain its upward trajectory next year, even after rallying 123% in 2023 so far.
What is the Price Target for PANW Stock?
According to TipRanks’ analyst rating consensus, PANW is a Strong Buy, based on 29 Buys and five Hold ratings in the past three months. Still, the average Palo Alto Networks price target is $300.94, implying 2.5% downside potential.
Advanced Micro Devices (NASDAQ:AMD)
Here’s another large-cap technology business that’s not in the “Magnificent Seven” club but still deserves special attention. Advanced Micro Devices was actually the darling of the chipmaker market earlier this year before artificial intelligence and Nvidia captured Wall Street’s attention.
Yet, Advanced Micro Devices doesn’t intend to let Nvidia dominate the market without any competition. Advanced Micro Devices’ new lineup of MI300 microchip models is designed to take aim at Nvidia’s best AI-compatible processors in the coming year.
Like the other companies on this list, Advanced Micro Devices recently surpassed Wall Street’s quarterly EPS estimates several times in a row. So, will AMD stock shoot for the moon even after running 119% higher year-to-date in 2023? There are no guarantees, but Advanced Micro Devices’ relentless focus on AI processors should inspire confidence in this chipmaking contender.
What is the Price Target for AMD Stock?
On TipRanks, AMD stock comes in as a Strong Buy based on 26 Buys and eight Hold ratings in the past three months. Nonetheless, the average Advanced Micro Devices price target is $132.41, implying 5.5% downside potential.
The Takeaway
Now, you have an overview of a few of the top-performing stocks of 2023. Even staunch contrarians must admit that Nvidia, Meta Platforms, Palo Alto Networks, and Advanced Micro Devices have kept the bears and short sellers at bay in 2023.
If the “bigger-is-better” principle continues to hold true in 2024, there’s room for these companies to expand their horizons and generate robust revenue. Therefore, enterprising investors might want to give some or all of these tech-focused 2023 winners a try in the coming year.
