AI Drives Gains in 2024 as Some S&P 500 Stocks Struggle

The S&P 500 saw remarkable gains in 2024, driven by the explosive growth of companies tied to artificial intelligence (AI). However, not all companies shared in the success, as execution challenges dragged down several big names.

AI-linked companies played a pivotal role in pushing the S&P 500 to its best two-year performance since the late 1990s dot-com boom. Among the standouts:

• Palantir: The software company surged more than 340%, becoming the top performer of the year.
• Vistra: This power producer, which supplies energy to data centers, saw its stock climb nearly 260%.
• Nvidia: The chipmaker, already a market favorite, gained over 170%, further solidifying its position as a leader in AI hardware.

These gains highlight the market’s enthusiasm for AI, even as other sectors faced headwinds.

At the other end of the spectrum, several well-known companies saw steep losses due to operational struggles:

• Walgreens Boots Alliance: Closing stores and grappling with heavy debt, the company’s stock dropped more than 64%, amid speculation it might be sold.
• Intel: Losing ground in the competitive AI market and implementing significant layoffs, Intel’s shares fell by over 60%.
• Moderna: With reduced demand for COVID-19 vaccines and a scaled-back pipeline, the biotech company shed nearly 60% of its value.

While AI stocks powered the market through most of the year, the tech sector experienced a late pullback. The Nasdaq fell about 4% in the last two weeks of December, and most of 2024’s top gainers closed the year on a downward note.