App development company AppLovin Corporation (APP) was the year's top-performing stock amid a comeback in the technology sector in 2023, while tumor-treatment device maker NovoCure Limited (NVCR) has the unenviable claim of being the worst-performing stock of the year, resulting from problems in an important cancer therapy clinical trial for ovarian cancer.
Key Takeaways
- As measured by the S&P 500 Index, the broader market gained 20%.
- AppLovin Corporation, the top-performing stock of 2023, surged 258%.
- NovoCure Limited, the lowest-performing stock, plunged 82%.
- Top-performing stocks were in the technology sector, which benefited from the widespread adoption of artificial intelligence (AI) and expanding digital services.
- The lowest-performing stocks of 2023 highlighted the impact of specific adverse events, financial challenges, and shifting market dynamics on individual companies.
Four of the top five top-performing stocks this year were from the technology sector, which gained exceptional momentum from the widespread adoption of artificial intelligence (AI) and hopes that the Federal Reserve is nearing the end of its rate hiking cycle to combat inflation. Technology stocks are particularly sensitive to interest rate fluctuations because the sector relies on borrowing for innovation and pursuing growth opportunities.
The bottom-performing stocks in 2023 illustrated companies' vulnerability to various pressures in a rapidly changing economic landscape. NovoCure faced setbacks in a critical clinical trial, AMC grappled with a changing entertainment landscape and financial restructuring, DISH had declining subscriber numbers amid consumer spending shifts, Hawaiian Electric encountered legal and reputational issues, and Plug Power dealt with supply chain disruptions.
The top and bottom five stocks below areRussell 1000 Index constituents that returned the highest and lowest year-to-date (YTD) total returns through the close of the market on Dec. 1, 2023. As a benchmark gauge, the Russell 1000 gained 16% over the same period.
Top 5 Stocks of 2023
1. AppLovin Corporation (APP)
- YTD return: 258.1%
- Sector: technology services
- Market Cap: $12.56B
AppLovin's core business is a platform for mobile app developers to market and grow their apps. Their services include tools for app analytics, user acquisition, and finding ways to support the apps through in-app advertising.
The Palo Alto-based company's stock price surged more than 25% in early August after its second-quarter earnings were much stronger than earlier projections and after its successful rollout of the AI-based advertising engine, AXON 2.0. That momentum has continued, with the company's top and bottom lines growing 21% and 63% in its latest quarter.
2. NVIDIA Corporation (NVDA)
- YTD return: 227.57%
- Sector: electronic technology
- Market cap: $1.117T
NVIDIA is a mammoth in the AI sector. The company sells AI-powered software and cloud gaming services — two areas of technology that gained widespread adoption in 2023. It designs and manufactures specialized chips for gaming, data science, mobile, and automotive markets.
Nvidia shares jumped almost 25% in late May after the AI chip supplier delivered results far exceeding Wall Street expectations. Fiscal first quarter 2024 adjusted earnings were $1.09 per share, surpassing estimates of 92 cents a share, while revenues of $7.19 billion topped forecasts of $6.52 billion.
3. DraftKings Inc. (DKNG)
- YTD return: 254.74%
- Sector: consumer services
- Market cap: $17.12B
The company offers online sports betting, casino, fantasy sports, and digital collectible products in several U.S. states and across the globe.
DraftKing's share price reached a new 52-week high in November after reporting a 57% year-over-year (YOY) jump in third-quarter revenues, driven by healthy customer usage, the acquisition of new customers, and the expansion of its Sportsbook product into new jurisdictions. In recent months, Sportsbook has launched in Kentucky and Maine.
4. Vertiv Holdings Co (VRT)
- YTD return: 234.57%
- Sector: electronic technology
- Market cap: $17.33B
Vertiv Holdings sells hardware, software, analytics, and ongoing services for data centers, communication networks, and commercial and industrial facilities. This includes power, cooling, and IT infrastructure products. Operating globally, some of the company's brands include Liebert, NetSure, Avocent, and Geist.
Vertiv shares shot up almost 30% in early August after the company posted a 24% increase in second-quarter sales and raised 2023 net sales guidance by $285 million. The favorable news was due to more favorable prices, higher volumes, and supply chain improvements.
5. Palantir Technologies Inc. (PLTR)
- YTD return: 218.31%
- Sector: technology services
- Market cap: $39.82B
The Denver-based company specializes in big data analytics for various sectors. Users perform data analysis and deploy software virtually through its key software platforms, Palantir Foundry and Palantir Apollo.
After a brief retracement below the 50-day simple moving average (SMA) in late October, the company's share price regained momentum by early November after reporting better-than-expected third-quarter results: revenue increased 17% from a year earlier to $558 million, while the company's customer count grew 34% YOY amid strong demand for its AI-integrated software.
Bottom 5 Stocks of 2023
1. NovoCure Limited (NVCR)
- YTD return: -84.04%
- Sector: health technology
- Market cap: $1.37B
NovoCure develops and markets devices that create tumor-treating fields (TTF) that disrupt cancer cell division. The company's product line includes Optune, Optune Lua, and Optune XYZ.
The NovoCure share price plunged 38% in late August after the company said its TTF therapy failed to increase survival rates for patients with ovarian cancer. The stock price has also been pressured by rising research and development costs, which increased by 3% in the latest quarter.
2. AMC Entertainment Holdings, Inc. (AMC)
- YTD return: -83.20%
- Sector: consumer services
- Market cap: $1.48B
AMC Entertainment operates movie theaters in the U.S. and Europe. The company, which saw its share price gain over 30-fold between January and June 2021 amid a meme-stock-fueled buying frenzy, has movie, online ticket bookings, food distribution, and other related services.
AMC's share price fell below a key support level at $35 in early August after initiatinga one-for-10reverse stock splitto increase capital. Since then, it has raised capital twice more, totaling $675 million, to shore up its balance sheet.
3. DISH Network Corporation (DISH)
- YTD return: -72.04%
- Sector: consumer services
- Market Cap: $2.07B
DISH sells satellite television, internet, and wireless services. The company owns the online streaming platform Sling TV and offers customers access to popular channels, such as ESPN, Disney Channel, and TNT.
Its shares have traded below the 200-day SMA for all 2023 and fell to a new 52-week low in early November after DISH reported a 9.8% drop in revenues in the third quarter. Pay TV and wireless subscribers declined 64,000 and 225,000, respectively, as consumers cut back discretionary spending on entertainment.
4. Hawaiian Electric Industries, Inc. (HE)
- YTD return: -66.71%
- Sector: utilities
- Market cap: $1.47B
Hawaiian Electric provides utility services to 95% of Hawaii's population across five islands: Oahu, Maui, Hawaii, Lanai, and Molokai. The company also offers renewable energy and electrification services and serves residential, commercial, and industrial customers.
Hawaiian Electric's shares plunged 34% in mid-August after news surfaced that the utility could be held liable for not doing enough to prevent the devastating Lahaina wildfires that killed at least 99 people on the island of Maui.
5. Plug Power Inc. (PLUG)
- YTD return: -63.09%
- Sector: electronic technology
- Market cap: $2.91B
Plug Power develops hydrogen energy products such as electric forklifts, delivery vehicles, and backup power generators. The company has over 40,000 fuel cell systems.
PLUG has traded below its 50-day SMA (below the 200-day SMA) throughout 2023, and the stock has remained in a steady downtrend. The company grew its gross margins by 21% YOY in the third quarter, but supply challenges in the North American hydrogen network pressured its 2023 financial results.
The Bottom Line
The top five stocks of 2023 benefited from the AI boom in the technology sector and an expansion of digital offerings, as well as hopes that the Federal Reserve will curtail its interest rate hikes in the near term. The year's bottom five stocks, however, struggled because of a combination of internal challenges and external market pressures. The five bottom performers faced factors that potentially reflect broader industry trends and economic shifts, which significantly affected their market performance this year.
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