3 First-Half Champions – Including the Top-Ranked Stock in My System
If you’re invested in an S&P 500 index fund, you’re probably pretty happy with the first half of 2024.
The benchmark index gained a solid 14.5% the last six months, which is already about 50% more than the annual average.
But what a difference if you own the top performers.
Fortunately, I’ve recommended two to my readers, and I own one myself. So I’ll take that as win-win.
As regular Power Trends readers know, I pick my stocks based on analyzing the most predictive data in the most predictive way to help us zoom in on stocks with the highest odds of making money. And quite often, it’s big money.
That’s the case with these three first-half champions from the S&P 500, Nasdaq 100, and my very own Quantum Edge system.
The S&P 500 Winner
This might surprise a few people, but regular Power Trends readers know Super Micro Computer (SMCI).
It soared 188% in the first half of the year to claim the S&P 500 crown and beat out Nvidia’s (NVDA) 150% surge.
SMCI is a big beneficiary in the AI boom. The company provides high-performance and high-efficiency servers designed to handle AI applications.
Is this stock set to maintain its blistering pace?
Source: TradeSmith Finance
At the moment, its Quantum Score of 67.2 is a fraction under the ideal buy zone of 70 to 85, but it was right in the thick of that zone when we added it to our Quantum Edge Pro portfolio last September.
SMCI rocketed more than 300% higher in a little more than two months to start the year, briefly topping $1,200 per share before pulling back. Shares have traded between $750 and $1,000 the last three months or so, and that has weakened SMCI’s Technical Score to 61.8.
That’s by no means bad, but it has dragged the overall Quantum Score under 70. Importantly, though, the fundamentals remain solid at 75.
We sold one-third of our shares for 150% profits early in the year, and then another one-third for 258% gains. Taken together, we’ve guaranteed more than a double on the full position, even if the stock went to $0.
I wouldn’t bet on SMCI gaining another 188% in the second half of the year, but given this company’s leading position in AI servers and strong quantitative rankings, higher prices are likely. We may well re-establish a full position in Quantum Edge Pro when the time is right.
The Nasdaq 100 Winner
And speaking of Nvidia (NVDA), it takes the crown on the Nasdaq 100. SMCI is not in the index, clearing the way for NVDA to claim the top spot.
This beast got bigger and bigger, even becoming the most valuable company in the world at one point as measured by market capitalization. After a recent dip, NVDA’s current market cap is now a little over $3 trillion, behind Microsoft (MSFT) and Apple (AAPL).
Source: TradeSmith Finance
NVDA rates a buy with its 84.5 Quantum Score. The fundamentals have improved thanks to the company’s robust growth and surging demand for its AI chips, and the technicals have cooled a little bit as shares came off the recent highs.
As with SMCI, I might not bet on another 150% run these next six months. But Nvidia’s data is virtually all positive, and this company should remain a powerhouse.
(Disclosure: I own NVDA in personal accounts.)
The Quantum Edge Winner
I get more excited about this winner than the others, even though it trails on price performance – at least for the moment.
Arista Networks (ANET) ran up49% in the first half of 2024, which may not look all that big compared to SMCI and NVDA, but it’s a big jump by any measure. Its through-the-roof quantitative ratings indicate it may have even better potential over time.
Source: TradeSmith Finance
That 91.4 Quantum Score is currently the top in my system. And just look at the balance with the fundamentals and technicals, both also scoring over 90. That’s rare.
And it also has four Big Money buy signals in my system in the last 30 days, compared to one for Nvidia and none for SMCI.
That Technical Score is borderline overheated, so a near-term pullback would not be surprising. We’re up 117% in TradeSmith Investment Report, and I’m currently monitoring it to determine whether to take some of those big profits or let them ride.
ANET is a leader in next-generation networking, and that theme intersects with artificial intelligence and quantum computing to provide the foundation for the next tech revolution. It’s a great company with big potential if you can buy at the right price.
I hope you have a prosperous second half of 2024. I think July might be pretty good, but August and September will likely have some of the usual bumps along the way. The election might inject some volatility as well. Those are the times to buy high-quality stocks like these that have beefy fundamentals, strong technicals, and Big Money inflows.
Talk soon,
Jason Bodner
Editor, Jason Bodner’s Power Trends