The stock market experienced a remarkable rally in 2024, with the S&P 500 delivering two consecutive years of gains exceeding 20%. This resurgence was driven by several factors, including a cooling inflation rate, falling interest rates, and the anticipation of lower corporate taxes under a second Trump administration. Tech stocks, particularly those involved in artificial intelligence (AI), captured investors’ imaginations, while utilities rebounded strongly due to increased electricity consumption.
Tech Stocks Drive Market Gains
AI Advancements Propel Top Performers
Among the top five best-performing stocks in the S&P 500, Palantir and NVIDIA stood out due to their direct connection to AI advancements. Palantir, known for its data analytics and AI platforms, saw its stock price surge by an astounding 340%, driven by significant contracts with the Department of Defense. These contracts included a $480 million deal for its Maven Smart System and a $401 million follow-on contract for its Vantage data-gathering platform, cementing its position as a critical asset in government and military operations.
NVIDIA also experienced immense growth, fueled by its dominant position as a supplier of GPUs (graphics processing units), which are essential for enabling AI applications and Bitcoin mining. The company generated a staggering $35 billion in revenue in the third quarter alone, as demand for its hardware soared. As of January 6, 2025, NVIDIA’s market capitalization reached $3.7 trillion, making it the world’s second-largest company by market capitalization. This phenomenal growth highlighted the increasing importance of AI and technology in shaping the future of various industries.
Energy Demand Boosts Related Stocks
Tech-driven growth extended beyond traditional technology stocks, influencing companies like Vistra and GE Vernova, which indirectly benefited from the increased energy demand spurred by data center expansions. Vistra, which joined the S&P 500 in May of the previous year, saw its stock price skyrocket by 261% in 2024. The company’s natural gas and nuclear power plants successfully met the reliability and scalability needs of data centers, helping them keep up with the surging energy requirements driven by advancements in AI and cloud computing.
Moreover, Vistra’s strategic agreements with cloud computing giants like Amazon and Microsoft to supply power at premium prices further bolstered its financial performance, solidifying its status as a top performer in the S&P 500. GE Vernova, General Electric’s energy spinoff, also experienced significant growth during the year. The company’s stock rose by 150% after it went public in April 2024. GE Vernova’s gas turbines were in high demand as providers sought to address the growing energy needs of data centers, while its involvement in renewable energy projects, such as a $2.75 billion wind energy agreement in Australia, cemented its leadership in the sector.
Utilities Rebound Strongly
Increased Electricity Consumption
Utilities, the lowest-performing S&P 500 sector in 2023, rebounded strongly in 2024, reflecting a significant change in electricity consumption driven by AI, electrification, and decarbonization efforts. The Energy Information Agency (EIA) predicts that global electricity use could rise by as much as 75% by 2050, a projection that has captured investors’ attention and fueled the resurgence of utility stocks. Vistra and GE Vernova, among the top performers in this sector, exemplify this shift.
Vistra’s stock price skyrocketed by 261%, reflecting the company’s ability to meet the increased demand for reliable and scalable energy solutions essential for data centers and other energy-intensive operations. Meanwhile, GE Vernova’s stock rose by 150%, driven by strong demand for its energy solutions, including gas turbines and renewable energy projects. This sector-wide rebound underscored the critical role that utilities play in supporting the rapid expansion of technology and the global transition towards more sustainable energy sources.
Strategic Growth and Expansion
Vistra’s success in 2024 was further bolstered by strategic agreements with major cloud computing companies like Amazon and Microsoft. These agreements allowed Vistra to supply power at premium prices, significantly enhancing its financial performance and ensuring its position as a key player in the evolving energy landscape. The company’s ability to secure lucrative contracts with industry giants underscored its adaptability and strategic foresight in capitalizing on emerging opportunities.
Additionally, GE Vernova’s involvement in renewable energy projects played a significant role in its growth throughout the year. The company’s projected sales for 2028 increased to $45 billion, up from previous estimates of $43 billion, highlighting its robust growth trajectory and leadership in the renewable energy sector. One notable project was a $2.75 billion wind energy agreement in Australia, signed in the previous year, reflecting GE Vernova’s commitment to expanding its renewable energy portfolio and meeting the growing global demand for sustainable energy solutions.
Travel Boom and Unusual Correlations
United Airlines’ Resurgence
United Airlines represented a distinctive investment narrative in 2024, driven by the resurgence of post-pandemic air travel. The airline’s shares soared by 135%, marking its best year ever since going public in 2006. This impressive performance was fueled by the Transportation Security Administration (TSA) reporting the highest number of screened passengers at U.S. airports on record, with over 900 million travelers. Capitalizing on this trend, United operated its largest-ever domestic schedule and significantly expanded its international routes, reflecting a renewed consumer demand for travel.
The company’s massive $1.5 billion share buyback program, announced in October, significantly boosted investor sentiment and confidence in its long-term growth prospects. This strategic move not only underscored United’s financial robustness but also reinforced its commitment to returning value to shareholders. The revival of the travel industry, coupled with United’s proactive measures to adapt and expand, made it one of the standout performers in the market for 2024.
Unprecedented Gold and S&P 500 Correlation
In 2024, the stock market enjoyed an impressive rally, with the S&P 500 posting gains of over 20% for two consecutive years. Several factors contributed to this resurgence. A decline in inflation rates, falling interest rates, and expectations of lower corporate taxes under a second Trump administration fueled the market’s growth. Particularly noteworthy were tech stocks, especially those in the artificial intelligence (AI) sector, which captivated investors. Additionally, utilities saw significant rebounds due to heightened electricity consumption. The combination of these elements created a robust market environment, attracting a wide range of investors eager to capitalize on the favorable conditions. The optimism around AI stocks was driven by increasing advancements and applications in various industries, making them a hot investment. Utilities benefited from growing demand for energy, reflecting changes in consumption patterns and energy needs. Overall, the confluence of these factors fostered a dynamic and optimistic market atmosphere.
