- The tech stock boom has some of its thunder stolen by outperformers from other industries.
- A homebuilder stock, three cruise operators, and Chipotle have all outperformed Apple and Netflix on the S&P 500 this year.
The tech stock boom of 2023 is getting some of its thunder stolen by unlikely rivals – from tourism, real estate and food industries.
Cruise operators Carnival Corp., Royal Caribbean, Norwegian Cruise Line, home construction company PulteGroup and Chipotle have surpassed Apple and Microsoft on the S&P 500 index this year – delivering impressive year-to-date returns of 139%, 109%, 84%, 70%, and 51%, respectively.
Meanwhile, Apple and Microsoft stocks have gained 45% and 38% respectively so far this year despite benefiting from the strongest investment theme of the year – the rise of artificial intelligence.
A return on stock is the change in value of an investment over time. A positive return is a profit, and a negative one represents a loss.
Apple and Microsoft – the two biggest companies in the world by market value – trailing non-tech names in the stock market seems to support the argument of some market experts that the tech-share surge is overhyped and overstretched.
Top economist David Rosenberg warned last month that the AI-focused investor frenzy in the tech sector reminds him of the dot-com bubble of the late 1990s. Bank of America Global Research's CIO Michael Hartnett and TAM Asset Management's CIO James Penny too have expressed similar views.
No doubt, the tech sector has enjoyed a sizzling rally this year. US stocks have soared so much that the S&P 500 even entered a new bull market. The tech-heavy Nasdaq 100 index has jumped about 37% year-to-date, powered by industry heavyweights including Nvidia, Tesla, and Meta.
Santa Clara-based semiconductor company Nvidia has emerged as the clear winner of the tech frenzy, climbing almost 190% year-to-date, helping the firm break into the elite club of $1 trillion market-cap companies.
Against that backdrop, why is a homebuilder, three cruise operators, and Chipotle outperforming tech giants?
Improved homebuilder sentiment, strong earnings, and resilient housing demand despite higher interest interest rates have helped boost PulteGroup.
Meanwhile, the cruise industry has experienced a comeback from a multi-year downturn caused by the COVID-19 pandemic. Pent-up tourism demand has helped Royal Caribbean and Carnival notch hefty gains this year.