The S&P 500 posted its best first quarter performance in five years.

The strong fourth quarter momentum carried over into 2024, with the S&P 500 posting its best first quarter since 2019, returning 10.1% through March 28 (US markets closed on Good Friday, March 29). .

Stock markets have surpassed most expectations, with many analysts and market observers calling for a slowdown in growth while some economists talk of a possible recession. But by the end of March, all three major stock indexes were up significantly, each hitting record highs for the quarter.

The S&P 500 ended the quarter up 10.1% at 5,254, while the Nasdaq Composite closed the quarter up 9.1% at 16,379. The Dow Jones Industrial Average rose 5.6% to 39,807 in the quarter, while the Russell 2000 rose 4.8% to 2,124.

Let’s take a look at the stocks that performed best in the first quarter.

NVIDIA keeps running.

Last quarter, the No. 1 stock on the Nasdaq and the second-best performing stock in the S&P 500 was a giant semiconductor company. nvidia (NASDAQ:NVDA). NVIDIA surged about 83% in the first quarter to $903 per share. This represents a 239% increase in 2023. NVIDIA was boosted by outstanding performance in the fourth quarter, including record revenue of $2 billion and net profit. It rises by 765% every year.

NVIDIA’s first quarter outlook was even better. That’s because the company is expected to post another record-breaking sales quarter. In addition, the company launched the most powerful new chip ever, the Blackwell-generated artificial intelligence (AI) chip. NVIDIA is showing no signs of slowing down and is still maintaining a reasonable forward P/E.

But the best large-cap stocks this quarter are: super micro computer (NASDAQ:SMCI) has one big thing in common with NVIDIA: AI. While NVIDIA makes chips that can handle complex AI computing tasks, Super Micro Computer, commonly called Supermicro, builds servers that can accommodate high-performance computing and AI in markets such as data centers and cloud computing.

Super Micro Computer returned a whopping 242% in the first quarter alone, trading at about $1,010 per share at the end of March. The stock rose in the company’s earnings report, which showed that net sales for the quarter ended Dec. 31 doubled from the same quarter a year earlier, reaching $3.6 billion. Meanwhile, Supermicro’s net income rose 68% to $296 million, or $5.10 per diluted share. .

Guidance for the company’s fiscal third quarter, which ended March 31, calls for net sales of $3.7 billion to $4.1 billion and diluted EPS of $4.79 to $5.64, indicating no slowdown in growth. Supermicro’s trailing P/E is 81, but its more reasonable forward P/E is 33.

Disney rebounded

Walt Disney Corporation (NYSE:DIS) has had a difficult few years, but it was the best performer in the blue-chip Dow Jones Industrial Average in the first quarter, returning 35.4% through March 28, reaching about $122 per share. For the quarter, Disney delivered a strong fourth-quarter earnings report, with earnings up 49% year-over-year to $1.04 per share thanks to significant cost savings.

More cost cuts are expected in 2024, as Disney aims to grow revenue by 20% in fiscal 2024 and expects its struggling streaming business to become profitable by the end of the year.

Also last quarter, Disney announced the launch of a sports streaming service, scheduled to launch in the fall, along with Fox and Warner Bros Discovery. The company also acquired a $1.5 billion stake in Epic Games, which operates popular video games. Fortnite.

Meanwhile, Disney is dealing with a proxy battle with activist investor Nelson Peltz of Trian Fund Management. Peltz has been pushing for change at Disney for more than a year and is working to join the board.

The results of the board vote will be announced at Disney’s annual meeting on Wednesday, and reports as of Tuesday indicate that Tryan’s candidates, including Peltz, have lost. Stay tuned for tomorrow’s results as the meeting could be a catalyst for the company and its stock.

Therefore, it was expected that the first half of the year would be difficult and the situation would improve in the second half. Now, with rate cuts ahead in the second half of the year, the 2024 market may trend higher than many experts thought.