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5 Top-Performing S&P 500 Stocks of 1H Set to Shine Further
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The S&P 500 closed the first half of 2024 with a strong gain of 14%. Though the gain was below the level seen in the bumper first half of 2023, it represents one of the strongest performances for the first six months of a year since the late-1990s dot-com bubble. The broad market index achieved 31 records in the first six months with analysts expecting more records later in the year.
The ongoing artificial intelligence (AI) craze, rate-cut bets and strong corporate profit growth were the biggest catalysts driving the stocks higher. Investors can consider some of the best-performing stocks of the first half that have a Zacks Rank #1 (Strong Buy) or 2 (Buy), suggesting continued outperformance. These stocks also have a double-digit expected earnings growth for the current fiscal year. Some such stocks are Super Micro Computer Inc. (SMCI - Free Report) , NVIDIA Corporation (NVDA - Free Report) , Vistra Energy Corp. (VST - Free Report) , Constellation Energy Corporation (CEG - Free Report) and Eli Lilly and Company (LLY - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
The "Magnificent Seven" is the biggest engine of growth for the S&P 500, accounting for 31% of the weightage in the index. About 60% of the gains were driven by “mega-cap” tech companies — NVIDIA, Microsoft, Amazon, Meta Platforms and Apple. NVIDIA alone accounted for 31% of the market’s first-half advance. With the latest surge, NVIDIA, Apple and Microsoft are in the race to become the world’s most valuable company and hit a market capitalization of $4 trillion on surging enthusiasm over AI capabilities. This technology-driven momentum is expected to continue at least through the summer.
In the latest FOMC meeting, U.S. policymakers penciled in just one rate cut for this year and projected four cuts for 2025. The Fed altered language in its statement, noting there has been “modest further progress toward the committee’s 2% inflation objective.” Previously, the statement pointed to a “lack” of further progress. Low rates reduce the cost of borrowing, often needed to finance the expansion of companies, thereby driving growth in the economy. It typically reduces the attractiveness of fixed-income investments like bonds, leading investors to seek higher returns in the equity markets.
Earnings are expected to remain robust for the second quarter. Per Zacks Earnings Trends report, second-quarter earnings for the S&P 500 index will be up 8.3% from the same period last year on 4.6% higher revenues. This is the highest quarterly earnings growth pace since 9.9% growth in the first quarter of 2022 and would follow 6.7% earnings growth on 3.2% revenue gains in the first quarter of 2024.
Further, a strong first half for the S&P 500 Index historically bodes well for the rest of the year. Since the early 1950s, when the index climbs more than 10% through June, it rises by a median of roughly 10% in the second half, per data compiled by Bloomberg. However, elevated valuations, the U.S. presidential election in November and uncertainty about the path of interest-rate cuts will weigh on stocks in the second half of this year.
First-Half Outperformers
Super Micro designs, develops, manufactures and sells energy-efficient, application-optimized server solutions based on the x86 architecture. The stock skyrocketed 188.2% in the first half. Super Micro has an estimated earnings growth rate of 44.1% for the fiscal year (ending June 2025). It sports a Zacks Rank #1 and has a Momentum Score of B.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of graphic processing units. The stock saw a solid earnings estimate revision of 3 cents for the fiscal year ending January 2025 over the past month and has an estimated growth rate of 106.1%. Shares of NVDA rose 149.5% in the first half. NVIDIA sports a Zacks Rank #1 and has a Growth Score of A.
Vistra Energy is an energy company that offers electricity and power generation, distribution and transmission solutions. The stock surged 123.2% in the first half. It saw a solid earnings estimate revision of 15 cents for this year over the past 30 days, with an estimated growth rate of 10%. Vistra Energy has a Zacks Rank #1 and a VGM Score of B.
Constellation Energy generates and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock jumped 71.3% in the first half. Constellation Energy has an expected earnings growth rate of 52.7% for this year and a Zacks Rank #2.
Eli Lilly is one of the world’s largest pharmaceutical companies and boasts a diversified product profile, including a solid lineup of new successful drugs. The stock gained 55.3% in the first half. Eli Lilly has an estimated earnings growth rate of 115.3% for this year. It has a Zacks Rank #2 and a Growth Score of B.
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5 Top-Performing S&P 500 Stocks of 1H Set to Shine Further
The S&P 500 closed the first half of 2024 with a strong gain of 14%. Though the gain was below the level seen in the bumper first half of 2023, it represents one of the strongest performances for the first six months of a year since the late-1990s dot-com bubble. The broad market index achieved 31 records in the first six months with analysts expecting more records later in the year.
The ongoing artificial intelligence (AI) craze, rate-cut bets and strong corporate profit growth were the biggest catalysts driving the stocks higher. Investors can consider some of the best-performing stocks of the first half that have a Zacks Rank #1 (Strong Buy) or 2 (Buy), suggesting continued outperformance. These stocks also have a double-digit expected earnings growth for the current fiscal year. Some such stocks are Super Micro Computer Inc. (SMCI - Free Report) , NVIDIA Corporation (NVDA - Free Report) , Vistra Energy Corp. (VST - Free Report) , Constellation Energy Corporation (CEG - Free Report) and Eli Lilly and Company (LLY - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
The "Magnificent Seven" is the biggest engine of growth for the S&P 500, accounting for 31% of the weightage in the index. About 60% of the gains were driven by “mega-cap” tech companies — NVIDIA, Microsoft, Amazon, Meta Platforms and Apple. NVIDIA alone accounted for 31% of the market’s first-half advance. With the latest surge, NVIDIA, Apple and Microsoft are in the race to become the world’s most valuable company and hit a market capitalization of $4 trillion on surging enthusiasm over AI capabilities. This technology-driven momentum is expected to continue at least through the summer.
In the latest FOMC meeting, U.S. policymakers penciled in just one rate cut for this year and projected four cuts for 2025. The Fed altered language in its statement, noting there has been “modest further progress toward the committee’s 2% inflation objective.” Previously, the statement pointed to a “lack” of further progress. Low rates reduce the cost of borrowing, often needed to finance the expansion of companies, thereby driving growth in the economy. It typically reduces the attractiveness of fixed-income investments like bonds, leading investors to seek higher returns in the equity markets.
Earnings are expected to remain robust for the second quarter. Per Zacks Earnings Trends report, second-quarter earnings for the S&P 500 index will be up 8.3% from the same period last year on 4.6% higher revenues. This is the highest quarterly earnings growth pace since 9.9% growth in the first quarter of 2022 and would follow 6.7% earnings growth on 3.2% revenue gains in the first quarter of 2024.
Further, a strong first half for the S&P 500 Index historically bodes well for the rest of the year. Since the early 1950s, when the index climbs more than 10% through June, it rises by a median of roughly 10% in the second half, per data compiled by Bloomberg. However, elevated valuations, the U.S. presidential election in November and uncertainty about the path of interest-rate cuts will weigh on stocks in the second half of this year.
First-Half Outperformers
Super Micro designs, develops, manufactures and sells energy-efficient, application-optimized server solutions based on the x86 architecture. The stock skyrocketed 188.2% in the first half. Super Micro has an estimated earnings growth rate of 44.1% for the fiscal year (ending June 2025). It sports a Zacks Rank #1 and has a Momentum Score of B.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of graphic processing units. The stock saw a solid earnings estimate revision of 3 cents for the fiscal year ending January 2025 over the past month and has an estimated growth rate of 106.1%. Shares of NVDA rose 149.5% in the first half. NVIDIA sports a Zacks Rank #1 and has a Growth Score of A.
Vistra Energy is an energy company that offers electricity and power generation, distribution and transmission solutions. The stock surged 123.2% in the first half. It saw a solid earnings estimate revision of 15 cents for this year over the past 30 days, with an estimated growth rate of 10%. Vistra Energy has a Zacks Rank #1 and a VGM Score of B.
Constellation Energy generates and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock jumped 71.3% in the first half. Constellation Energy has an expected earnings growth rate of 52.7% for this year and a Zacks Rank #2.
Eli Lilly is one of the world’s largest pharmaceutical companies and boasts a diversified product profile, including a solid lineup of new successful drugs. The stock gained 55.3% in the first half. Eli Lilly has an estimated earnings growth rate of 115.3% for this year. It has a Zacks Rank #2 and a Growth Score of B.