The U.S. stock market has experienced a robust start to the new year, driven by positive economic data and impressive growth in the tech sector. Despite these strong gains on Wall Street, there was one notable absence – the most valuable car company in the world.
Best-Performing Stocks in January
Let’s take a closer look at the best- and worst-performing stocks in January.
International Business Machines (IBM)
The best-performing stock in the Dow Jones Industrial Average for the month was International Business Machines (IBM). With a remarkable 15% increase in value over the past 31 days, IBM has achieved its best monthly performance since October 2022.
On January 25, shares of IBM soared by 9.5% following the company’s announcement that its “book of business” for AI workloads in the fourth quarter had doubled compared to the previous quarter. Investors were also pleased to learn that IBM exceeded expectations, reporting a fiscal 2023 free cash flow of $11.2 billion, surpassing their own forecast of $10.5 billion. Looking ahead, IBM anticipates reporting even higher free cash flow of $12 billion in 2024, exceeding Wall Street’s estimate of $11 billion.
Unfortunately, Boeing had a tough month and emerged as the worst performer in the Dow, experiencing a significant decline of 21%. This marks their poorest monthly performance since September 2022, according to Dow Jones Market Data.
Boeing has faced a series of challenges, leaving investors concerned about the overall safety of their planes. Troubling incidents include an emergency door-plug failure on a MAX 9 jet operated by Alaska Air earlier this month, followed by a runaway wheel on a different plane operated by Delta Air Lines a few weeks later.
However, there is a silver lining as Boeing recently announced a narrower-than-expected quarterly loss, offering a glimmer of hope for better days ahead.
Standout Performances in the S&P 500
Turning our attention to the S&P 500, Juniper Networks takes the spotlight as the best-performing stock in January. With an impressive 26% surge in share price, the company achieved its best monthly performance since October 2011.
The majority of this gain came on January 9 after The Wall Street Journal reported that Hewlett Packard Enterprise was in talks to acquire Juniper Networks. Shares surged by 22% that day and climbed an additional 2.1% on January 10 when the merger was confirmed by both companies.
In conclusion, the U.S. stock market has encountered a strong start to the new year, aided by positive economic data and remarkable growth in the tech sector. While some stocks faltered, others flourished, making January an eventful month for investors.
HPE to Acquire Juniper in $14 Billion Deal
Hewlett Packard Enterprise (HPE) announced its plans to acquire Juniper through an all-cash deal valued at $14 billion. The transaction is expected to be completed by the end of 2024 or early 2025.
Tesla Faces Challenging Start to the Year
Tesla had a challenging start to the year as it emerged as the worst performer in the S&P 500, with a 24% decline in January. This marks its worst month since December 2022.
The disappointing fourth-quarter earnings report played a role in Tesla’s decline. The company fell short of analysts’ expectations, reporting earnings of 71 cents per share instead of the predicted 73 cents. Additionally, Tesla’s management expressed that automotive sales growth for the year would be significantly lower than in 2023. As a result, Tesla’s shares dropped by 12%, which also impacted CEO Elon Musk’s position as the world’s richest man.
Despite these setbacks, Al Root from ‘s’ explains that Tesla’s stock has historically experienced fluctuations after earnings announcements. Out of 40 times, the stock has fallen on more than 23 occasions, with an average fluctuation of around 8%.
Nvidia Takes the Lead in the Nasdaq 100
Nvidia continues to demonstrate strong performance in the Nasdaq 100, with its stock surging by 25% in January. As a result, it holds the position of the top performer in the Nasdaq 100 this month.
The driving force behind Nvidia’s upward momentum is its involvement in artificial intelligence (AI). Analysts have expressed optimism regarding the company’s future prospects in this field. Pierre Ferragu from New Street Research highlighted Nvidia’s significant upside potential due to its already established customer base. Similarly, Rick Schafer from Oppenheimer identified Nvidia as one of his top picks for 2024, emphasizing the continued growth led by AI as a dominant theme in the market.
In contrast, Tesla experienced a decline in the Nasdaq 100 performance for January.