Tech stocks rallied in 2024, with powerhouse artificial intelligence (AI) stocks like Nvidia (NVDA -2.87%) and Palantir Technologies (PLTR -1.51%) bringing up the S&P 500 (^GSPC -1.36%). But it was a good year for the whole market, and the tech-heavy Nasdaq-100 only surpassed it by a hairbreadth -- a 25.9% gain versus 25% for the S&P 500.
Two of the tech index's components had massive upswings over the year, beating everything in the broader index. But those gains were balanced by ho-hum performance by some of its stocks, and a good 34 of the total lost some of their value last year.
That's one of the biggest benefits of buying into an index through an exchange-traded fund (ETF): It reduces your risk of choosing any losers and provides access to the best gainers.
Would you have been able to predict the top five Nasdaq-100 stocks at the beginning of last year? Here they are, why they scored, and whether they can repeat in 2025.
Tech leads, of course
The top five leaders of the Nasdaq-100 in 2024 were, in order of total return:
- AppLovin (APP -3.71%)
- MicroStrategy (MSTR -0.51%)
- Palantir Technologies
- Nvidia
- Axon Enterprise (AXON -1.31%)
APP Total Return Level data by YCharts
As you might guess, AI was the major driver behind most of these gains. Nvidia was the poster stock for generative AI last year, but AppLovin and Palantir are drawing interest for their use of AI to create value for their users. MicroStrategy has been gaining on the increase in Bitcoin, and Axon is the only non-service company on the list, making safety gear for law enforcement.
The AI stocks still have a lot of life left in them as they continue to innovate, and Axon is gaining fans for its new product roll-outs. MicroStrategy presents the most risk on this list, since its movements rely on Bitcoin's.
It's worth noting that both AppLovin and Axon only recently came into the index, positively skewing what might have come in below the broader's market's gain.
