The year 2023 has witnessed some top performing stocks in the U.S. stock market, fueled by a confluence of factors including the artificial intelligence (AI) boom, the surge in the so-called “Magnificent Seven” stocks, abating inflation, and the Federal Reserve’s optimistic stance on interest rate hikes.
Top performing stocks dominate various sectors
Investors in the US tock market have witnessed substantial gains across multiple sectors, with some stocks more than doubling in value this year. Here are the top-performing stocks from different sectors in 2023:
Technology sector: Nvidia (NVDA)
The technology sector has been the shining star of 2023, with a remarkable rise of nearly 54%. This surge is mainly attributed to the AI craze and the surge in the “Magnificent Seven” stocks. In this sector, Nvidia has taken the lead, skyrocketing by approximately 237%.
Nvidia, known worldwide for its visual computing technologies and GPU invention, has experienced significant earnings estimate revisions, projecting a growth rate of 61.5%. Currently holding a Zacks Rank #2, Nvidia has a Growth Score of A.
Construction sector: Dream Finders Homes (DFH)
The construction sector also experienced robust growth, with a gain of over 50% in 2023, driven primarily by homebuilder stocks, which soared by about 80%. The catalyst behind this surge is the shortage of inventory in the resale market, boosting demand for new homes.
As one of the top performing stocks, Dream Finders Homes witnessed an astonishing 317% surge in 2023 and is poised for further growth in 2024, supported by its top Zacks Rank number 1 and a Momentum Score of B. With a positive earnings estimate revision of 19 cents for the upcoming year and an estimated growth rate of 12.1%, Dream Finders Homes is making waves in the housing market.
Automotive sector: Blue Bird Corp. (BLBD)
The automotive sector has been invigorated by the growing adoption of electric vehicles (EVs), driven by the quest for a sustainable future. Blue Bird Corp., engaged in designing, engineering, manufacturing, and selling school buses and related parts, witnessed a remarkable 159% surge in 2023.
With a solid earnings estimate revision of 61 cents for the fiscal year ending September 2024 and an estimated growth rate of 86%, Blue Bird Corp. stands strong with a Zacks Rank #3 and a VGM Score of A.
Retail sector: Carrols Restaurant Group (TAST)
The retail sector saw a substantial rally of more than 28%, fueled by increased consumer confidence and robust spending. Among the companies in this sector, Carrols Restaurant Group emerged as a star, surging by an astounding 464%. TAST has been one of the top performing stocks in 2023.
With a market capitalization of $418 million, Carrols Restaurant Group enjoys a solid Zacks Rank #1 and a VGM Score of A. Earnings estimates for the next year have seen a positive revision of 7 cents over the past 30 days, with an estimated earnings growth rate of 8.3%. Carrols Restaurant Group is the largest BURGER KING franchisee in the United States, boasting over 800 restaurants.
Business services sector: Marathon Digital Holdings (MARA)
The business services sector experienced a 22.5% increase in 2023, with various industries within the sector performing remarkably well. Notably, bitcoin mining stocks outperformed expectations, driven by strong momentum in Bitcoin, partly attributed to the anticipation of U.S. interest rate cuts and regulatory approval for Bitcoin ETFs.
Marathon Digital Holdings, a digital asset technology company specializing in cryptocurrency mining, jumped an astounding 688%. It holds a Zacks Rank #3 and experienced a positive earnings estimate revision over the past 30 days for 2024, coupled with an estimated earnings growth rate of 55.6%. Marathon Digital Holdings is actively engaged in the blockchain ecosystem and digital asset generation.
Positive market momentum in 2023
In the broader market, the Dow Jones Industrial Average has consistently reached record highs, while the S&P 500 stands a mere 0.3% below its peak in January 2022. These indices are set to close the year with impressive gains of 13% and 24%, respectively. Leading the charge is the Nasdaq Composite Index, with a potential record-breaking annual gain not seen since 2003, soaring by a staggering 44%. This surge is largely attributable to the resurgence of mega-cap technology stocks and the fervor surrounding AI.
The U.S. economy has weathered the storm of Federal Reserve policy tightening and is now poised for a significant policy shift. Federal Reserve Chair Jerome Powell recently hinted at three rate cuts of 75 basis points for the upcoming year, citing easing inflation and a resilient economy.
Recent indicators paint a picture of economic expansion at a moderate pace, buoyed by robust consumer spending, strong job gains, and a low unemployment rate. Corporate earnings have also shown improvement, with the S&P 500 index witnessing earnings growth in the third quarter after three consecutive quarters of decline.
As a matter of fact, 2023 has indeed been a remarkable year for the U.S. stock market, characterized by significant gains across diverse sectors. Investors have witnessed the surge of top performing stocks, driven by factors such as the AI boom, the rise of “Magnificent Seven” stocks, favorable economic conditions, and the Federal Reserve’s accommodating stance. As the year comes to a close, the market continues to offer opportunities for investors, with optimism prevailing as we look ahead to 2024.
