The performance of the "Magnificent Seven" this year was indeed "magnificent" - Nvidia in particular enjoyed a threefold increase in its share price. Shares from other sectors also delivered substantial gains.
21 December 2023. FRANKFURT (Börse Frankfurt). Hardly anyone can complain about the stock market year 2023: The DAX has risen by 19 percent, the S&P 500 by as much as 23 percent. Other country indices also performed extremely well. The best performance - calculated in euros - this year was delivered by the Cyprus Stock Exchange, with an increase of 52 percent (Bloomberg, as at December 20). Hungary also did really well with 45 percent, Poland with 41 percent, Greece with 40 percent and Sri Lanka with 38 percent. But of course there are also losers, especially emerging markets. Kenya topped the list with a drop of 45 percent, followed by Nigeria (down 28 percent), Thailand (down 19 percent) and the Hang Seng China and the classic Hang Seng with losses of 18 percent each.
In terms of sectors, the technology industry has left everything behind this year. The US tech index Nasdaq 100 climbed 52 percent to a new all-time high. This was driven by the "Magnificent Seven", i.e. Amazon (US0231351067), Apple (US0378331005), Alphabet (US02079K3059), Meta (US30303M1027), Tesla (US88160R1014), Microsoft (US5949181045) and Nvidia (US67066G1040). In the wake of the AI boom, Nvidia's share price on the Frankfurt Stock Exchange has risen from 135 euros at the start of the year to 444 euros - more than tripling.
Boom topics cyber security and AI
But other US tech stocks have also performed extremely well, such as CrowdStrike (US22788C1053), the US cyber security company from Sunnyvale in California. "The company, founded in 2011, experienced its breakthrough in 2015 with the proof that North Korea's government was behind the cyberattack on Sony Pictures Entertainment," recalls Walter Vorhauser, who trades the stock for Oddo BHF. The share price, which had suffered from the general weakness of tech stocks in 2022, rose from 100 to 233 euros this year - more than doubling. "The figures for the third quarter were very strong, and the outlook for the year as a whole is also very good."
2023 was also a good year for the Californian chip manufacturer Advanced Micro Device AMD: "AMD was on the verge of collapse once before and then benefited enormously from the strong growth in demand for graphics cards. Now AI is the driver". The AMD share price (US0079031078) has doubled this year, from 62 to 124 euros. "Now the share is heading for the all-time high reached during the pandemic." Alongside Intel, AMD is one of Nvidia's biggest competitors in the field of AI chips.
Airbus takes off, LVMH back on the ground
However, companies from completely different sectors have also brought shareholders strong share price gains this year. These include Europe's aerospace group Airbus (NL0000235190). "After the pandemic, airlines are ordering a lot of planes again," reports Roland Stadler, who trades foreign equities for Baader Bank. At the beginning of the year, Airbus shares were still trading at 113 euros on the Frankfurt Stock Exchange and then climbed to 144 euros; they are currently still trading at 137 euros.
According to Stadler, the French luxury goods group LVMH (<FR0000121014Y) also attracted a lot of attention this year. For a long time, it was said that "luxury is always possible", but since the summer, the share has weakened. At currently 739 euros, the share price is well below the all-time high of just under 905 euros in April, but still well above the price of 696 euros at the start of the year.
AI euphoria without end
There is still a great deal of confidence in technology shares. For example, J.P. Morgan, UBS, Goldman Sachs, Barclays Capital and Bernstein consider Nvidia to be an "outperformer" and recommend buying it. Vorhauser also believes that the tech sector will continue to develop well, especially in special niches such as AI and cyber security.
The situation is different for stocks such as LVMH. UBS, Deutsche Bank and Barclays Capital, for example, only recommend "hold" for the share. J.P. Morgan also recently downgraded LVMH from "Overweight" to "Neutral". The normalization that began in 2023 after the previous strong run is likely to continue in the coming year, they say. However, the price target of 790 euros (previously 835) is still above the current price.
By: Anna-Maria Borse © 21 December 2023, Deutsche Börse AG
Anna-Maria Borse ist Finanz- und Wirtschaftsredakteurin mit den Schwerpunkten Finanzmarkt/Börse und volkswirtschaftliche Themen.
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