(Bloomberg) -- Tech investors will remember 2024 as a year in which the artificial intelligence trade gained even more steam and giants like Nvidia Corp. and Meta Platforms Inc. carried the S&P 500 for the second time in a row.
But beyond the biggest tech names, there were plenty of other interesting trades. Heavy spending on AI by tech behemoths helped extend a rally beyond chip and server makers to select software stocks, power producers and even owners of vast caches of data used to develop AI services.
“Companies that weren’t the first beneficiaries are starting to see growth,” said Scott Yuschak, managing director of equity strategy at Truist Advisory Services. “Right now AI is what to like within tech, but we expect a broader tech tape in 2025.”
The year also brought plenty of drama, with one of the most popular AI plays slumping amid accounting problems that threaten its stock listing. And a semiconductor pioneer’s turnaround went off the rails, resulting in the ouster of its chief executive officer.
Here’s a roundup of some of the year’s biggest stock stories and the outlook for each going into 2025.
Reddit
Reddit Inc.’s initial public offering in March was a hit with investors, but few anticipated the extent of gains to come.
The social-media network owner’s shares have jumped 382% since they listed, fueled in part by data-licensing deals with major companies like OpenAI and Alphabet Inc.’s Google, which use Reddit data to train large-language models. That, coupled with investments Reddit is making to better monetize its user base, contributed to a strong quarterly report and forecast in October that sent the stock soaring.
Reddit shares have dramatically outperformed Meta and other social media peers over the past six months, and the rally has room to run in 2025, according to Morgan Stanley analyst Brian Nowak. He upgraded the stock to overweight earlier this month, saying that engagement and advertising initiatives will continue to fuel growth.
Palantir Technologies
Few software companies have managed to generate significant revenue from AI services, but Palantir Technologies Inc. is a standout. Demand for its data-analysis AI products has reinvigorated growth, putting sales on pace to expand 26% in 2024, up from 17% in the prior year.
The shares have gained 332% in 2024, pushing its market value to nearly $170 billion, up from $37 billion at the beginning of the year. The stock will join the Nasdaq 100 next week.
While some on Wall Street are cautious on the stock after this year’s rally, analysts at Wedbush are betting that 2025 will bring more gains on expectations for more AI-fueled growth.
With a price-to-projected-earnings multiple of more than 150 times, Palantir is the second-most expensive stock in the S&P 500, behind Ventas Inc., according to data compiled by Bloomberg. Only three of 22 analysts tracked by Bloomberg have a buy rating on Palantir.
Vistra
So vast are the energy needs of AI computing that some utilities stocks crossed Tech Watch’s radar this year.
Power producer Vistra Corp. is the top-performing stock in the S&P 500 in 2024, with a 256% gain that has even topped Nvidia’s 164% advance. (Palantir was only added to the S&P 500 in September.)
Vistra’s revenue has seen a boost from power-hungry data centers, and with tech behemoths pledging to spend even more on AI next year, the outlook for electricity and other infrastructure providers looks positive.
Vistra, along with peer Constellation Energy Corp., have been particularly prominent among utilities because of their position as independent power producers — a status that means they sell electricity at market prices, unlike regulated utilities.
Intel
Heading into 2024, Intel Corp. shares were getting a lift from investor optimism that things couldn’t get much worse for the troubled chipmaker. That bet couldn’t have been more wrong.
Intel shares have dropped 62% this year as it fell further behind competitors like Nvidia and Advanced Micro Devices Inc. while facing mounting costs from building new plants and investing in production technology. In August, it suspended a dividend that had been in place since 1992 and announced a plan to cut 15,000 jobs. Chief Executive Officer Pat Gelsinger was forced out earlier this month.
With two interim CEOs running the company as the board searches for Gelsinger’s permanent successor, Intel’s path looks murkier than ever. Questions about strategy changes and whether the company will be split up likely won’t be answered for months. Only seven of more than 50 analysts tracked by Bloomberg recommend buying the shares.
Super Micro Computer
Super Micro Computer Inc. looked unstoppable in the first half of the year amid soaring demand for its servers used in data centers. The stock peaked in March, days after it was tapped for inclusion in the S&P 500, with a market value of $66 billion.
In August, the company was targeted by a short seller. A day later, it delayed its annual report, citing a review of its internal controls, which put the stock’s Nasdaq listing in jeopardy. In October, its auditor resigned.
The shares are now down 74% since that March record. Super Micro hired a new auditor in time to get an extension from Nasdaq, and now has until Feb. 25 to file its financial reports. In the meantime, it reportedly brought on Evercore Inc. to help it raise capital.
Top Tech Stories
Micron Technology Inc., the largest US maker of computer-memory chips, tumbled after its revenue forecast missed projections, hurt by sluggish demand for smartphones and personal computers.
Apple Inc. has halted work on a project to build an iPhone hardware subscription service, according to people familiar with the matter, retreating from an attempt to change the way consumers buy its flagship device.
Hon Hai Precision Industry Co., the iPhone maker known as Foxconn, is in talks with Nissan Motor Co.’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, Taiwan’s Central News Agency said, citing people it didn’t identify.
Billionaire Elon Musk is turning to an executive from one of his own companies, a former Trump White House official and other tech executives to help hire staff for the incoming administration’s nascent effort to slash the size and scope of government.
Amazon.com Inc. warehouse employees and contract drivers in four states plan to walk off the job at 6 a.m. Eastern on Thursday ahead of the holiday delivery rush, according to the International Brotherhood of Teamsters.
