If you're limiting yourself to only the "Magnificent Seven" S&P 500 stocks — you're missing out.
Six of the 10 best stocks this year on a percentage-gain basis, including Royal Caribbean Cruises, Palo Alto Networks and PulteGroup, are not part of the Magnificent Seven tech stocks, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That might surprise some investors who think the only big gains are possible from tech giants like Apple, Microsoft, Nvidia, Meta Platforms, Tesla, Alphabet and Amazon.com. Meanwhile, more than half the stocks in the S&P 500 are still down for the year.
Seeing such a small handful of winners shows why 2023 has been so hard for stock pickers, says research from Ned Davis Research's Chief U.S. Strategist Ed Clissold.
"The equity rally has been narrow," he said.
Move Aside Magnificent Seven For Top Gains
The Magnificent Seven are having a great year in terms of total market value gains.
But they're not always the very best sources of gains for investors. Just four of the Magnificent Seven rank in the top 10 S&P 500 stocks this year: Nvidia, Meta, Tesla and Amazon. Apple, still the most valuable stock in the S&P 500, is up just 42% this year. That ranks it as only the 35th best on the year in the S&P 500.
Ned Davis takes it a step further. The firm found only about a third of the S&P 500 topped the index in the past three months. "The jump in cap-weighted U.S. equity benchmarks has been driven by a small number of stocks," Clissold said.
But some of the S&P 500 stocks with top percentage jumps are a bit different.
Top Non-Magnificent Seven Stock
Following Nvidia and Meta, Royal Caribbean Cruises is the next top stock of the year. Its shares are up nearly 99% on the year. And that's despite skidding 10% from the S&P 500's July 31 peak this year.
To be sure, the amount of market valley minted in the Royal Caribbean Cruises rally of $25 billion pales next to the $1.2 trillion gain by Nvidia. But on a percentage basis, the gain is an impressive double.
And a number of the top percentage gains are in the tech sector. Computer networking firm Palo Alto Networks is actually the No. 4 performer in the S&P 500 with a 83% gain. That tops even Tesla, which has seen shares rise nearly 82.2% this year.
All this isn't to belittle the power of the largest tech stocks. But it's a reminder that bigger isn't always better.
Top Percentage Gains In S&P 500 This Year
| Company | Ticker | YTD % ch. | Sector |
|---|---|---|---|
| Nvidia | 232.7% | Information Technology | |
| Meta Platforms | 173.6 | Communication Services | |
| Royal Caribbean Cruises | 97.9 | Consumer Discretionary | |
| Palo Alto Networks | 83.2 | Information Technology | |
| Tesla | 81.6 | Consumer Discretionary | |
| PulteGroup | 80.2 | Consumer Discretionary | |
| Advanced Micro Devices | 80.3 | Information Technology | |
| Adobe | 75.4 | Information Technology | |
| Arista Networks | 73.3 | Information Technology | |
| Amazon.com | 69.8 | Consumer Discretionary |
