Key facts
- The S&P went up 24% in 2023, including gains of more than 50% in technology and communications sectors.
- Nvidia was the biggest gainer on the S&P, up 239%.
- Meta and Royal Caribbean were also in the top three best bets for the year.
One of the major issues in the upcoming presidential election is voter dissatisfaction with the economy. Apparently, those voters aren’t looking at the S&P 500, much less the presidential odds at the best political betting sites.
The S&P finished the year up 24% over 2022, and it had week-over-week increases for the last nine weeks of the year, its longest run of success in nearly two decades.
The top sectors driving the increase were technology stocks, which were up 56% on the year, and communications services, which were up 53%.
Here’s a look at the five best investments on the S&P for the year that just ended.
5. Uber
After having a crash in 2022 that saw the share price plummet by 41%, the ride service company saw its stock rebound and then some this past year.
Uber finished the year up 149%. The company benefitted from a return to normalcy as we moved farther away from the pandemic. Its revenue was also boosted by entering new markets—Uber is now in 70 countries—and by adding new services. By keeping costs low, Uber turned its first operating profit ever earlier in the year.
Uber outperformed its top competitor, Lyft, which only saw a 37% gain, and it remains a strong buy in 2024 in the opinion of most market analysts.
4. Builders FirstSource
The company might not be a household name like some of the others at the top of the S&P 500 top gainers, but the supplier and manufacturer of building materials saw its stock go up 157% in 2023.
That gain came despite a general slowing in the housing market. Builders saw its sales, income, and gross profit percentage all drop from the previous year, as high-interest rates slowed the housing boom, but it was able to mitigate that by taking advantage of competitors that were less prepared to weather the slowdown.
Builders had five major acquisitions through the first three quarters of the year, which brought in companies that were responsible for about $350 million in additional sales. It remains a consensus moderate buy going forward into the new year.
3. Royal Caribbean
Like Uber, the cruise line benefitted from a world that is rapidly putting the pandemic in its rear-view mirror. Royal Caribbean stock jumped 162% this past year, as customers were ready to start vacationing again.
The company’s CEO said that Royal Caribbean was able to “hit the ground running” once pandemic restrictions were lifted, and the market was seeing demand return to pre-pandemic levels at the end of 2022. Travelers have only gotten hungrier to sail, and 2024 is looking like it might be a record year for bookings.
Royal Caribbean has also earned attention from its high-end luxury offerings, including a nine-month around-the-world cruise that has become a social media sensation. The company is still a strong buy for 2024.
TikTok star gives a look inside life on Royal Caribbean’s extravagant 9-month cruise: ‘Crazy’ https://t.co/f9TDVB64XZ
— Fox News (@FoxNews) January 12, 2024
2. Meta Platforms
Another stock whose 2023 gains were spurred on in large part by recovering from a plunge in 2022. The parent company for social media giants Facebook and Instagram entered the year at its lowest stock price since 2016, after a 64% drop. It jumped 194% in 2023, however, thanks in large part to cost-cutting. That came close to doubling its previous best year ever—a 105% gain in 2013.
Facebook founder, Mark Zuckerberg, called 2023 the “year of efficiency” for his company at the start of the year. In addition to lowering expenses, revenue was also up as advertisers on the social media platforms returned in large numbers after a dropoff in 2022.
Meta saw its biggest revenue gains in two years in the third quarter. Zuckerberg was also more open to listening to input from shareholders this year, instead of brushing aside alternate viewpoints, an accusation leveled by many critics. Meta is still a consensus buy heading into the new year.
1. Nvidia
2023 was the year of AI, and no one benefitted from the mainstream acceptance of the newest technology more than this chipmaker.
It previously provided technology for gaming, self-driving cars, and crypto trading, but artificial intelligence is what sent the stock into the stratosphere this year, as Nvidia gained 239%.
ChatGPT runs on Nvidia chips, and, as that AI application captured the world’s attention, demand for the chips exploded as other companies tried to get in early on the AI bandwagon. Its gains continued throughout the year, and Nvidia enters 2024 as not just a strong buy but one of the most highly recommended stocks around.
