What’s next for five of 2024’s most dramatic tech stock stories?
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Tech investors will remember 2024 as a year in which the artificial intelligence trade gained even more steam, and giants like Nvidia and Meta carried the S&P 500 for the second time in a row.
But beyond the biggest tech names, there were plenty of other interesting trades. Heavy spending on AI by tech behemoths helped extend a rally beyond chip and server makers to select software stocks, power producers and even owners of vast caches of data used to develop AI services.
“Companies that weren’t the first beneficiaries are starting to see growth,” said Scott Yuschak, managing director of equity strategy at Truist Advisory Services. “Right now, AI is what to like within tech, but we expect a broader tech tape in 2025.”
The year also brought plenty of drama, with one of the most popular AI plays slumping amid accounting problems that threaten its stock listing. And a semiconductor pioneer’s turnaround went off the rails, resulting in the ouster of its chief executive.
Here’s a round-up of some of the year’s biggest stock stories and the outlook for each in 2025.
Reddit’s initial public offering last March was a hit with investors, but few anticipated the extent of gains to come.
The social media network owner’s shares have jumped 382% since they listed, fuelled in part by data-licensing deals with major companies like OpenAI and Alphabet’s Google, which use Reddit data to train large-language models. That, coupled with investments Reddit is making to better monetise its user base, contributed to a strong quarterly report and forecast in October that sent the stock soaring.
Reddit shares have dramatically outperformed Meta and other social media peers over the past six months, and the rally has room to run in 2025, according to Morgan Stanley analyst Brian Nowak. He upgraded the stock to overweight earlier last month, saying engagement and advertising initiatives would continue to fuel growth.
Few software companies have managed to generate significant revenue from AI services, but Palantir Technologies is a standout. Demand for its data-analysis AI products has reinvigorated growth, putting sales on pace to expand 26% in 2024, up from 17% in the prior year.
The shares have gained 332% in 2024, pushing its market value to nearly $170bn (€163.6bn), up from $37bn (€35.6bn) at the beginning of the year. The stock has also joined the Nasdaq 100.
While some on Wall Street are cautious on the stock after last year’s rally, analysts at Wedbush are betting 2025 will bring more gains on expectations for more AI-fuelled growth.
So vast are the energy needs of AI computing that some utility stocks crossed Tech Watch’s radar last year.
Power producer Vistra is the top-performing stock in the S&P 500 in 2024, with a 256% gain that has even topped Nvidia’s 164% advance.
Vistra’s revenue has seen a boost from power-hungry data centres, and with tech behemoths pledging to spend even more on AI next year, the outlook for electricity and other infrastructure providers looks positive.
Heading into 2024, Intel shares were getting a lift from investor optimism that things could not get much worse for the troubled chipmaker. That bet could not have been more wrong.
Intel shares dropped 62% in 2023 as it fell further behind competitors like Nvidia and Advanced Micro Devices, while facing mounting costs from building new plants and investing in production technology. In August, it suspended a dividend that had been in place since 1992 and announced a plan to cut 15,000 jobs. Chief executive Pat Gelsinger was forced out last month.
With two interim CEOs running the company as the board searches for Gelsinger’s permanent successor, Intel’s path looks murkier than ever. Questions about strategy changes and whether the company will be split up likely will not be answered for months. Only seven of more than 50 analysts tracked by Bloomberg recommend buying the shares.
Super Micro Computer looked unstoppable in the first half of the year amid soaring demand for its servers used in data centres. The stock peaked in March, days after it was tapped for inclusion in the S&P 500, with a market value of $66bn (€63.5bn).
In August, the company was targeted by a short seller. A day later, it delayed its annual report, citing a review of its internal controls, which put the stock’s Nasdaq listing in jeopardy. In October, its auditor resigned. The shares are now down 74% since that March record.