The S & P 500 has been on a hot streak in 2024, reaching record highs and breaking through the 5,500 level for the first time. However, despite this impressive performance, some analysts are cautioning that a few high-flying stocks, such as Nvidia, may be at risk of falling from grace in the second half of the year.
Nvidia, a leader in artificial intelligence technology, has seen its stock price more than double this year, driven by investor excitement surrounding the AI boom. The company briefly overtook Microsoft in market capitalization, solidifying its position as a market darling. However, analysts fear that Nvidia’s impressive run may be coming to an end, as consensus price targets suggest a potential 11% pullback in the stock.
Despite being rated as a buy by analysts, Nvidia’s stock price has already surpassed their price targets, leaving little room for further upside. Concerns about increasing competition in the AI sector could further weigh on Nvidia’s stock price in the coming months, leading to a potential decline.
Chipmaker Qualcomm
Another company that has benefited from the AI boom in 2024 is Qualcomm, with its stock climbing nearly 47% this year. The company reported strong fiscal second-quarter results and bullish guidance, driven by robust demand for its advanced chips in premium smartphones, particularly in China. However, analysts are wary that Qualcomm’s stock may have outpaced itself, with price targets suggesting a possible 14% decline ahead.
The broader semiconductor sector has seen significant gains this year, with the VanEck Semiconductor ETF surging 51% in 2024. Despite this strong performance, some chip stocks, including Qualcomm, could be in for a pullback in the near future.
Potential Fall for Other Stocks
In addition to Nvidia and Qualcomm, other S & P 500 constituents, such as Garmin and Teradyne, are also facing potential pressure in the second half of the year. Analysts are closely monitoring these high-flying stocks, as their impressive runs may be reaching their limits based on current price targets.
Overall, while the S & P 500 continues to perform strongly in 2024, investors should be cautious of potential pullbacks in certain high-growth stocks. Analysts’ warnings about Nvidia, Qualcomm, and other companies serve as a reminder that even the hottest stocks can quickly fall from grace if market conditions change.