You’ve probably heard the disclaimer before: “Past performance is no guarantee of future results.” And that statement is true. However, I would add to the disclaimer: “But a big lead is almost always a good thing.”
Several large-cap stocks have a big head start that could allow them to finish the year strong. I expect these to be the three best performing stocks. S&P500 (SNPINDEX: ^GSPC) Stocks from 2024.
1. Nvidia
NVIDIA (NASDAQ: NVDA) is currently the biggest gainer in the S&P 500 year to date. The GPU maker’s shares have skyrocketed by over 150%. I don’t think Nvidia will give up its top spot until the end of 2024.
On August 12, I predicted that Nvidia stock would rise another 20% or more by the end of the year. My prediction has almost come true. One reason is that some of the factors weighing on Nvidia are now not as concerning.
More importantly, Nvidia has yet to announce its results for the second quarter of fiscal 2025. The company is expected to release its Q2 update on August 28. I fully expect another stellar quarter for Nvidia, which will fuel investor optimism.
I also think the company will reassure investors about the timing of the launch of its Blackwell-based chips. Blackwell is Nvidia’s latest GPU architecture, which CEO Jensen Huang believes will be the most successful product in the company’s history.
2. Super-microcomputer
Super-microcomputer (NASDAQ:SMCI)commonly referred to as Supermicro, is the second best performing stock on the S&P 500 this year. The IT infrastructure company’s shares are up about 115%. I expect Supermicro to increase this gain in the coming months.
Will Supermicro’s upcoming 10-for-1 stock split on October 1 be a big catalyst? Maybe, but I wouldn’t count on it. Even if the split does provide a boost, it could be temporary.
The better reason to continue to expect strong performance from Supermicro is the tailwind created by artificial intelligence (AI). In the fourth quarter of fiscal 2024, Supermicro generated revenue of $5.31 billion. For the first quarter of fiscal 2025, the company forecasts revenue between $6 billion and $7 billion. That’s a 22% increase in just three months – and much of that is due to AI-related demand.
Supermicro could also benefit from Nvidia’s launch of Blackwell chips. Even if that launch faces a longer-than-expected delay, Supermicro CEO Charles Liang doesn’t think his company will be too badly affected, as overall demand for its liquid cooling solutions is high.
3. Eli Lilly
I’m taking a risk on my next pick. Three S&P 500 stocks are currently outperforming Eli Lilly (NYSE: LLY) in addition to Nvidia and Supermicro. However, I have a feeling this big pharma stock could overtake them and finish the year as #3 in the S&P.
My bullish view of Lilly is largely based on my high expectations for the company’s tirzepatide franchise. In the U.S., the drug is marketed under the brand name Mounjaro to treat type 2 diabetes and under the brand name Zepbound to treat obesity. Outside the U.S., it is marketed as Mounjaro for both indications. Whatever you call it, tirzepatide is already a hugely successful blockbuster drug. Mounjaro generated second-quarter sales of $3.09 billion, while Zepbound generated $1.24 billion.
Investors also know that Lilly could have additional indications for tirzepatide on the way. The U.S. Food and Drug Administration (FDA) could make an approval decision for the drug to treat obstructive sleep apnea and obesity by the end of 2024. Lilly plans to file for regulatory approval of tirzepatide to treat heart failure with preserved ejection fraction (HFpEF) and obesity later this year.
We can’t overlook Lilly’s recently FDA-approved Alzheimer’s drug Kisunla. I don’t expect eye-popping sales for the therapy in the second half of the year, but more approvals outside the US are possible by the end of 2024. And if US sales are better than expected, Kisunla could give investors another reason to be excited about Lilly’s growth prospects.
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Keith Speights does not own any stocks mentioned. The Motley Fool owns Nvidia and recommends the company. The Motley Fool has a disclosure policy.
Prediction: These will be the best-performing S&P 500 stocks in 2024. Originally published by The Motley Fool
