It was a great first quarter of the year for stocks. The S & P 500 jumped 10.16% over the first three months and notched a series of all-time highs, including in Thursday’s session. It marked the index’s best first quarter in half a decade. The Dow Jones Industrial Average and Nasdaq also had strong performances and hit records during the quarter. The blue-chip Dow finished Thursday at a fresh peak, while the tech-heavy Nasdaq’s most recent record came on March 22. Markets have been buoyed by strong U.S. economic data , and investor excitement around artificial intelligence continued to propel many technology stocks higher. Over the first quarter, we initiated two new positions , took advantage of buying opportunities , and booked profits in outperforming stocks when necessary. Here are our top four performers and laggards during the first quarter of 2024, from market close on the final trading day of 2023 through Thursday’s session. The winners NVDA YTD mountain Nvidia (NVDA) year-to-date performance Nvidia came in No. 1 for quarterly gains, jumping 82.5% during the period, as its extraordinary 2023 performance didn’t subside when the calendar flipped. The AI chipmaker was the second-best performing stock in the S & P 500 in the quarter, behind only server maker Super Micro Computer , a key Nvidia partner that joined the index this year. Nvidia continues to ride the wave of investor enthusiasm for generative AI, maintaining its dominant position in the lucrative, booming market for AI computing power. It’s always possible that after such a monstrous run a pullback or consolidation phase could be in order. After all, Nvidia largely treaded water in the second half of 2023. But we see no threat to its AI leadership any time soon, as its GTC conference last week made clear . META YTD mountain Meta Platforms (META) year-to-date performance Meta Platforms climbed 37.2% in the first quarter, coming in at second place within the portfolio. The parent company of Facebook and Instagram received a boost after its Feb. 1 earnings report , when management declared Meta’s first-ever quarterly dividend and issued knockout results and guidance. The stock surged 20.3% in the post-earnings session, and then more steadily moved higher in the following weeks – closing at a record high of $512.19 on March 7. To be sure, shares have declined since their peak earlier this month, coinciding with a general broadening out of the Wall Street rally into more cyclical parts of the market. The stock tumbled 1.68% on Thursday, closing out the quarter at $485.58 a share. At the Monthly Meeting on Wednesday, Jim Cramer reaffirmed his confidence in Meta, describing the social media heavyweight as the premiere advertising destination thanks to its deft use of AI to improve returns for marketers. DIS YTD mountain Walt Disney (DIS) year-to-date performance Walt Disney was the Club’s third-best performing stock in the quarter, with shares rising 35.5% during the three months. The gains have come against the backdrop of an ongoing proxy fight with activist investor Nelson Peltz, who is tussling with management over Disney’s turnaround plan and governance. Jim reiterated his support for Peltz during the Monthly Meeting , arguing that he would give Disney’s board much-needed oversight. Jim also contended the outside pressure being applied by Peltz’s Trian Partners has helped fuel the rally in Disney. Nevertheless, we’re looking to trim shares of Disney on the recent strength to rightsize our position. LLY YTD mountain Eli Lilly (LLY) year-to-date performance Rounding out the top four winners is Eli Lilly , which jumped 33.5% during the first quarter. Wall Street has continued to celebrate the pharmaceutical giant’s growth prospects in the booming GLP-1 drug category. Eli Lilly’s two products in the category — type-2 diabetes drug Mounjaro and weight loss treatment Zepbound — are crucial to the Club’s investment thesis. Zepbound, which was approved by U.S. regulators late last year, has shown early signs of success, as demonstrated in Eli Lilly’s Feb. 6 quarterly earnings report. While still making the top-four list, Eli Lilly shares have essentially traded sideways since mid-February. The laggards AAPL YTD mountain Apple (AAPL) year-to-date performance Apple suffered the most first-quarter losses in the portfolio, slumping 10.9% during the period. The iPhone maker has struggled since the start of 2024, with shares lagging on concerns around softening demand for its flagship device in China and the perception among some investors that it is behind in the AI race. Apple is also entangled in a series of legal and regulatory woes right now, including the Department of Justice’s landmark antitrust lawsuit against the company. Jim has maintained his “own it, don’t trade it” stance on Apple through it all, and believes future tailwinds like an AI-integrated iPhone could lead to a reversal in the stock’s fortunes. FL YTD mountain Foot Locker (FL) year-to-date performance Shares of Foot Locker declined 8.5% in the first quarter, making the sneaker retailer the second-worst-performing stock in the portfolio. The stock climbed over the first two months of the year, before experiencing a steep sell-off following Foot Locker’s March 6 quarterly results . The stock tanked 29% after management issued a big miss in full-year earnings guidance and pushed out its long-term operating margin goal. Some on Wall Street have started to warm back up to the stock, though. Analysts at Evercore ISI and Citigroup have recently upgraded the stock, arguing that a strategy shift at Nike could boost Foot Locker’s business. We remain hesitant about the shift in sentiment. As Jim said at the Monthly Meeting, we’re on the fence about Foot Locker, our smallest position, and could choose to leave that fence at any time. SBUX YTD mountain Starbucks (SBUX) year-to-date performance Starbucks stock was the portfolio’s third-worst performer in the first quarter, with shares dropping 4.8% over the period. The Seattle-based coffee chain has been a big disappointment for us, as it faces headwinds in key markets at home and overseas. This includes challenges in the U.S., China and the Middle East. Jim acknowledged these concerns during the Monthly Meeting on Wednesday, adding that members should be prepared for Starbucks to cut full-year guidance when it reports quarterly results in the coming weeks. The question, though, is whether all the bad news has already been priced into Starbucks shares, which are trading at a sizable discount to their five-year average, according to FactSet. PANW YTD mountain Palo Alto Networks (PANW) year-to-date performance Palo Alto Networks stock fell 3.7% during the first quarter, rounding out No. 4 for most losses. Shares of the cybersecurity company experienced a steep post-earnings sell-off after management cut its full-year revenue guidance on Feb. 20 . This is because Palo Alto is shifting its business strategy, choosing to give away some of its offerings for free to customers. Essentially, it’s short-term pain for possibly long-term gains because this new strategy could further solidify Palo Alto’s standing in the industry. We added to our position at the time, regarding the market’s reaction as overblown. At the Monthly Meeting on Wednesday, Jim said that we’d look to buy more if the stock tumbled below $280 per share. It closed Thursday’s session at $284.13 per share. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. 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Nvidia Corp CEO Jensen Huang speaks at the COMPUTEX forum in Taipei, Taiwan May 29, 2023.
Ann Wang | Reuters
It was a great first quarter of the year for stocks.