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The Nasdaq Composite Index hit a series of record highs and closed above the 17,000 milestone for the first time ever. Solid corporate earnings, artificial intelligence (AI) boom, and rate cut bets have been driving stocks higher. In particular, Nvidia’s blockbuster earnings spread huge optimism in the stock market along with the global artificial intelligence boom. This drove Nasdaq further up. The tech-heavy index has risen 13.4% so far this year.

While most of the stocks have performed well this year, we have highlighted five of them that more than doubled this year and have a Zacks Rank #1 (Strong Buy) or #2 (Buy). These are Super Micro Computer Inc. (SMCI - Free Report), Vital Farms Inc. (VITL - Free Report), Powell Industries Inc. (POWL - Free Report), Nvidia Corporation (NVDA - Free Report) and AppLovin Corporation (APP - Free Report).

Nvidia topped both earnings and revenue estimates and offered a bullish revenue outlook for the current quarter, thanks to the solid demand for its AI-enabled GPU chips. The AI chipmaker announced a 10-to-1 stock split, effective Jun 7, and increased its quarterly cash dividend by 150% to 10 cents per share.

Per the latest survey from Bank of America, expectations of interest rate cuts rather than earnings optimism have made investors the "most bullish" since November 2021. About 82% of global fund managers expect the first rate cut by the Fed in the second half, while 78% say a recession is unlikely in the next 12 months.

The expansion of AI applications holds the promise of ushering in fresh opportunities for growth in the tech sector and beyond. According to a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030.

However, concerns over stubborn inflation once again might halt the rally in the Index. This is because the Fed minutes and upbeat manufacturing data, both of which highlight concerns over stubborn inflation, have again pushed back the timing of rate cuts.

While inflation has eased over the past year, it failed to show further progress toward the Fed’s 2% objective in recent months, per its latest minutes. As such, the disinflation process would likely take longer than previously thought. Meanwhile, U.S. business activity growth accelerated sharply to its fastest pace in more than two years in May after two months of slower growth led by an upturn in the service sector. The data indicates that the U.S. economy is back on course for another solid GDP gain in the second quarter. The strength in the economy could spark a revival in inflation.
 

Best-Performing Stocks

Super Micro designs, develops, manufactures and sells energy-efficient, application-optimized server solutions based on the x86 architecture. The stock has skyrocketed 208% so far this year.

Super Micro saw a positive earnings estimate revision of $1.34 for the fiscal year ending June 2024 and has an earnings growth rate of 99.1%. It has a Zacks Rank #2 and a solid Momentum Score of B.

Vital Farms offers a range of produced pasture-raised foods. Its products include shell eggs, butter, hard-boiled eggs, ghee and liquid whole eggs. The stock has soared 157.5% year to date. It saw a positive earnings estimate revision of 17 cents over the past 30 days for this year, with an estimated earnings growth rate of 59.3%.

Vital Farms has a Zacks Rank #1 and a Growth Score of A.

Powell Industries designs, develops, manufactures, sells and services custom-engineered equipment and systems. The stock has soared nearly 133% so far this year. It saw a solid earnings estimate revision of $1.50 over the past 30 days for the fiscal year ending September 2024, with an estimated earnings growth rate of 119.4%.

Powell Industries has a Zacks Rank #1 and a Growth Score of A.

Nvidia is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit or GPU. The stock has risen 130%. Nvidia saw a positive earnings estimate revision of $1.05 over the past 30 days for the fiscal year ending January 2025, with an estimated earnings growth rate of 93.7%.

Nvidia has a Zacks Rank #2 and a Growth Score of A.

AppLovin provides a technology platform that enables developers to market, monetize, analyze and publish their apps. It has climbed 109% year to date. The stock saw a positive earnings estimate revision of 47 cents over the past 30 days for this year and has an estimated earnings growth rate of 202%.

AppLovin has a Zacks Rank #1 and a Growth Score of A.

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