If you own Apple, you’re pretty proud of your 77.7% gain this year. Just know that gain pales next to the very best S&P 500 stocks this year.
It’s hard for AirPod-wearing Apple (AAPL) investors to believe it, but 11 S&P 500 stocks this year delivered Apple-beating gains. These top stocks include mostly information technology stocks like chip companies like Advanced Micro Devices (AMD), and chip-making companies such as Lam Research (LRCX) and KLA (KLAC). This is according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
And they didn’t beat Apple by just a little bit. AMD, which sports an 87 IBD Composite Rating, is up 131.7% this year. That’s a real difference. Had you invested $10,000 in AMD, rather than Apple, you would have made 54% more, or $5,390.
You might want to take your AirPods out for a second.
Tech Sector Isn’t Just Apple
Apple is the S&P 500 king of technology in terms of market value. And its stock, with its 87 IBD Composite Rating, is no slouch.
This year, Apple’s stock created nearly $500 billion in new shareholder wealth. That’s an astounding amount, if you consider $7.1 trillion in stock market wealth was created in total this year, says Wilshire Associates. That means just Apple is responsible for roughly 7% of the money made in the stock market this year.
But when you consider the Technology Select Sector SPDR Fund (XLK) is up nearly 46% in 2019, you’d expect many of the big winners to hail from the top-performing sector.
And they did. Seven of the 11 S&P 500 stocks that topped Apple are all in the information technology sector.
Advanced Micro Devices (AMD)
S&P 500 Leader: AMD
No matter how great Apple’s stock was, AMD’s was even better. Much of the rally is due to higher hopes for revenue and profit in 2020. Analysts see computer sales picking up, but also demand for cloud computing to stoke demand for AMD’s products.
AMD’s adjusted earnings are expected to jump 77% in 2020 to $1.10 a share. Meanwhile, analysts are calling for revenue to climb 27%, making it one of the fastest-growing S&P 500 companies in 2020.
And investors don’t have to wait long for the profit boom. Earnings per share at AMD leapt 38% in the just-completed September quarter. That snapped two straight quarters of EPS declines.
Qorvo, a maker of circuits for mobile devices, gets an extra boost from the growth of high-speed 5G wireless networking in 2020. Most of the gains aren’t seen materializing until the fiscal year ended March 2021. Analysts are calling for fiscal year 2021 earnings to jump 16% on 7.6% higher revenue of $3.4 billion.
S&P 500 Winners Beyond Tech
Tech was the year’s winning theme, but there was more to the S&P 500 story. Even consumer discretionary stock Target (TGT) topped Apple with its 94% gain this year. The retailer’s 94 Composite Rating also beats Apple’s.
Target is winning from its hybrid approach of blending its online retail reach with its physical presence. In many ways, Amazon is having to emulate Target by opening stores and shifting inventory to local warehouses. Target’s earnings per share are seen rising 18% to $6.40 in 2020 on 4% higher revenue.
That’s not to detract from Apple investors’ win. But it’s important to know Apple’s not the only game in town.
S&P 500 Stocks That Beat Apple This Year
IBD, S&P Global Market Intelligence
Author: Matt Krantz
Source: Investors: Are These 11 Hot Stocks Even Better Than Apple?