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Niccolo Conte
2024-06-28 07:42:58
www.visualcapitalist.com
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The Stocks Driving S&P 500 Returns in 2024
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The S&P 500 is sitting at near-record highs, returning 15% year-to-date as of June 26, 2024.
Today, a limited number of stocks are powering the stock market’s rally as investors pour money into companies that are advancing AI technologies. As share prices skyrocket, many wonder if company valuations are overheated—or if they are supported by strong corporate fundamentals.
This graphic shows the top 10 S&P 500 stocks driving stock market returns in 2024, based on data from Goldman Sachs.
Big Tech Stocks Are Fueling Gains
Below, we show the companies making the largest contribution to the S&P 500’s rally:
| Rank | Company | Ticker | Contribution to S&P 500 Return YTD as of June 13, 2024 |
|---|---|---|---|
| 1 | Nvidia | NVDA | 4.94% |
| 2 | Microsoft | MSFT | 1.24% |
| 3 | Alphabet | GOOGL | 0.97% |
| 4 | Meta | META | 0.84% |
| 5 | Apple | AAPL | 0.81% |
| 6 | Amazon | AMZN | 0.72% |
| 7 | Broadcom | AVGO | 0.62% |
| 8 | Eli Lilly & Co. | LLY | 0.60% |
| 9 | Berkshire Hathaway | BRK.B | 0.22% |
| 10 | QUALCOMM | QCOM | 0.21% |
| Total S&P 500 Return YTD 2024 | 14.65% |
As of June 13, 2024.
Chipmaker Nvidia has driven over a third of S&P 500 returns this year, with its share price soaring 162% year-to-date as of June 13, 2024.
In June, Nvidia became the world’s most valuable firm, commanding an estimated 70% to 95% of the AI chip market. In the latest quarter, revenue surged by threefold compared to a year earlier amid high chip demand. Overall, big tech companies such as Meta, Amazon, and Microsoft made up roughly 45% of its data-center revenue, with Meta running a staggering 350,000 H100 chips to power its AI systems this year alone.
Falling in second is Microsoft, which has invested billions in AI startups including OpenAI and Wayve, a self-driving car firm. Microsoft is a cloud service provider for ChatGPT, the large language model built by OpenAI. As AI demand exceeds capacity, and other business segments see solid growth, Microsoft’s revenue increased 17% year-over-year as of the second quarter of 2024.
Google’s parent, Alphabet, ranks next, followed by Meta and Apple. Each of these companies is working on their own large language model which costs millions to train and run. Together, the top five stocks are driving about 60% of the S&P 500’s returns.
As we can see, just two of the top 10 S&P 500 stocks are not big tech names: pharmaceutical giant Eli Lilly and Berkshire Hathaway. This year, Eli Lilly’s share price is surging due to strong demand for its weight loss drug, Zepbound. During the first quarter of 2024, the newly-approved drug generated over $517 million in sales. Given its reported effectiveness, some analysts are forecasting it could be the best-selling drug ever in American history.
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