Palantir Technologies, MicroStrategy and Carvana were among the top stocks of 2024 as a rate-cutting campaign by the Federal Reserve, a resilient economy and strong corporate earnings provided a solid backdrop for the stock market.
After a stellar year for the stock market in 2023, it was a great year for Palantir stock, MicroStrategy stock and Carvana stock after the S&P 500 and Nasdaq composite confirmed new uptrends in early November 2023 with one-day gains of more than 1.5% in higher volume. That marked the start of 10 monthly gains out of 11 for the S&P 500 and also helped fuel some blistering gains for many of the 100 best companies of 2024.
As usual, a new product or service drove big earnings and revenue growth for many of the year's winners.
One theme in 2024 was how stock market leadership broadened out well beyond the Magnificent Seven. Leadership was much narrower in 2023, but it filled out nicely for much of 2024 as growth stocks in a variety of industry groups were among the year's best performers.
Multiple tech companies were among the top 10. In a rarity, a utility company was in the top 10. That was mainly thanks to the artificial intelligence trade, which played a role in many of the year's best performances.
Sezzle gets top billing in this year's list. And it really wasn't close after a more-than 10-fold gain for the stock. The "buy now pay later" firm competes with Affirm, which is less than 10% off its 52-week high after a huge run in the second half of 2024 but did not make the top 100.
Not surprisingly, Sezzle's run started just before revenue growth started to accelerate in the first quarter, from 36% to 60% to 71%. Over the same time frame, fund ownership also increased materially, from only 11 funds at the end of 2023 to more than 100 by the end of Q3 this year, according to IBD MarketSurge.
Sezzle climbed more than 1,000% percent, even after a December slump. The stock broke below its 50-day moving average Dec. 18, when a short seller accused the company of risky lending practices. Sezzle denied the allegations.
Best Companies Of 2024 In Software
Palantir was a big winner in 2024 as its AI offerings contributed to 43%-80% EPS growth in the first three quarters of 2024.
See The 100 Best Stocks Of 2024
Headline flow has been busy lately around the data analytics firm. In September, Palantir joined the S&P 500. In addition, it was just added to the Nasdaq 100 on Dec. 23.
Palantir's offerings include tools used mostly by government agencies for intelligence gathering, counterterrorism and military purposes.
Palantir reversed sharply higher during the week of Aug. 9, helped by a strong earnings report on Aug. 5. A few weeks after that, Palantir rose to new highs on Sept. 9. For the full year, the stock is up more than 375%.
AppLovin, No. 2 on this year's list, broke out hesitantly in late January, but the breakout really gained traction during the week ended Feb. 16, when the company reported 153% Q4 earnings growth. The results marked the start of several bullish earnings reports for AppLovin, which operates a mobile app marketing platform. The platform provides tools to developers to improve the marketing and monetization of their apps.
AppLovin broke out powerfully again on Sept. 11, soaring 13% in higher volume. That came a few weeks after the Nasdaq and S&P 500 confirmed new uptrends with follow-through signals on Aug. 13.
Meanwhile, bitcoin traded basically sideways from March through October. But Donald Trump's presidential victory in November sparked a rally in bitcoin and brief move above the $100,000 level. MicroStrategy, which made it a strategy to grow its bitcoin holdings, was among the five best performing stocks of 2024. At the end of 2024, MicroStrategy held 446,400 bitcoins.
But MicroStrategy recently flashed a sell signal with a sharp break of its 10-week moving average.
Best Companies In Data Centers
Other stocks with exposure to artificial intelligence and data centers (that handle AI tasks) were also among the top performers.
Astera Labs' gain of more than 250% is even more impressive because the stock's move didn't start until early August, when shares hit a low of 36.22.
Demand for the company's chip-based connectivity solutions for cloud computing and AI infrastructure is off the charts.
Revenue in Q3 soared 206% year over year to $113.1 million, marking the fourth straight quarter of triple-digit growth. Astera is expected to produce its first annual profit in 2024, 72 cents a share, with growth ramping up 61% in 2025 to $1.16 a share.
Speaking of data centers and their power needs, a couple of electric utilities were also among the best gainers in 2024.
Vistra provides electricity through its natural gas, nuclear, coal and solar facilities. When the company reported earnings in November, Vistra said it was pursuing deals with data center developers in Texas, along with PJM, a regional transmission organization that facilitates the movement of wholesale electricity in 13 states.
Group peer Talen Energy is another power producer and infrastructure provider that has more than tripled this year as data centers proliferate and require more electricity.
Best Companies Of 2024 In Retail
Carvana finished just outside the Top 5 after shares nearly quadrupled last year. No surprise that the stock's strength came after Carvana reported a 17% jump in Q1 revenue. The results halted at least five quarters of revenue declines, and marked the start of three straight quarters of accelerating top-line growth. Q4 growth is also expected to accelerate, up 36% to $3.29 billion.
Meanwhile, despite concerns about a hard landing for the economy in 2024, a couple of restaurant stocks nearly tripled. About a dozen other consumer stocks in the top 100 also reflect the undaunted U.S. consumer.
After an inauspicious debut in June 2023 at 22 a share, fast-growing Cava was a standout performer in 2024. The fast-casual Mediterranean chain corrected nearly 50% to a low of 29.05 in early October 2023. That was the bottom, as Cava went on a 56% run higher after that.
There's no doubt that Cava is one of the pricier stocks in the restaurant group based on its trailing price-earnings ratio of 242 and forward P-E of 181. But that hasn't stopped fund managers from accumulating shares. Keep in mind that Cava is expected to earn 50 cents a share in 2024, up sharply from 12 cents earned in 2023.
At the end of Q4 of 2023, 298 funds owned the stock. At the end of Q3 this year, ownership had grown to just over 500 funds.
Brinker International, the parent company of Chili's and Maggiano's, also made the best 100 companies list after three breakouts this year.
Shares jumped nearly 15% during the week ended Feb. 2 and another 12.6% during the week of May 3 as investors cheered back-to-back solid earnings reports. After that, Brinker nearly doubled after clearing a cup-with-handle base during the week of Sept. 20.
Follow Ken Shreve on X @IBD_KShreve for more stock market analysis and insight.
The "Best Companies Of 2024" logo and accolades are available for licensing through Investor's Business Daily's partner, The YGS Group, at IBDlicensing@theYGSgroup.com or 800-290-5460.
