Nvidia’s Red-Hot 2024 Start a Bright Spot as S&P 500 Eyes Record

Nvidia Corp. is off to its strongest-ever start to a year by one measure, keeping up a blistering rally that saw shares gain nearly 240% in 2023.

The artificial-intelligence darling has added roughly $128 billion in market capitalization after rising about 10% this month, an unprecedented gain in value in the first nine trading days of the year for the company.

It’s a boon for Nvidia bulls and signals that the AI trend still has momentum, at least for the firm viewed by many as one of the biggest early winners. Nvidia this year is easily outpacing the broader market and the rest of the so-called Magnificent Seven megacap technology stocks. That’s making it a major bright spot as the S&P 500 Index has stalled near record highs amid questions around corporate profits and the timing of anticipated Federal Reserve interest-rate cuts.

“From my standpoint, Nvidia is best of breed,” said Shana Sissel, chief executive officer of Banrion Capital Management LLC, adding that it’s dominant in its marketplace, has strong customer relationships and is growing fast. “It’s hard to find a lot of holes in the story.”

Nvidia had a better start on a percentage basis last year, to kick off its record rally. To be fair, those gains came after the stock lost half its value in 2022. For the next 12 months, analysts covering Nvidia have an average target price of almost $650, indicating roughly 19% upside for a company that now has a market capitalization greater than $1.3 trillion.