Artificial intelligence has been the primary force behind the gains made by the Nasdaq exchange in 2024. While the S&P 500 had risen 16% by July 4, and the Dow Jones Industrial Average was only 4% higher, the Nasdaq 100 soared 20% for the year.
This was before stock traders began cycling away from growth names, which caused top Nasdaq 100 stocks to pull back from their peak. Since the index is laden with technology stocks, which were the primary growth driver—though not the only one—it has fallen further than the others.
This does not mean the top Nasdaq 100 stocks are not still serious investments to consider buying. Below are the top three stocks on the index so far, which should also be on your radar for the rest of the year.
Nvidia (NVDA)
No surprise here, Nvidia (NASDAQ:NVDA) is the best-performing Nasdaq 100 stock so far this year. Shares are up 147% year-to-date on the demand for its artificial intelligence chips.
Nvidia, of course, is the premier AI chipmaker. Its older generate accelerators became the standard for data centers that needed the complex computing power they offered in graphics-intensive video gaming. The fact that they were perfectly up to the task of performing advanced algorithmic calculations made them essential for AI.
What set Nvidia apart from the competition early on was it immediately began innovating and building upon what was already successful. It also developed a comprehensive software suite that accompanied its chip, and has continued to do that since. So while Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) are building competing chips, Nvidia is already releasing next-generation AI accelerators and planning for what comes after that.
It seems hard to imagine the competition ever catching up at this point as Nvidia runs away from the field. Not that the market isn’t big enough for several winners but NVDA is the top Nasdaq 100 stock for a reason.
Arm Holdings (ARM)
Arm Holdings (NASDAQ:ARM) is approaching the first anniversary of its initial public offering and the stock is up 227% since then. It priced the IPO at $51 a share, opened for trading at $56 and closed its first day at of $63 per share, and has not looked back.
The stock goes for $167 today and is up 122% year-to-date, good enough to be the second top Nasdaq 100 stock. Yet, it is also down 10% from its recent peak as the market rotated out of previous leading growth stocks.
While AI is the primary factor driving ARM stock higher, the chip architecture developer only tangentially benefits from the technology. Because it doesn’t make semiconductors itself, it profits from the licensing of the intellectual property underlying its designs. Arm’s architecture is used by chipmakers and technology companies to design their own chips and CPUs.
Increasingly, Arm’s architecture is migrating away from the smartphone market where it owns a 99% share. Instead, it is entering into the data center market and revenue is soaring.
The stock market was underwhelmed by its second-quarter guidance. Yet, you can expect its financial report due at the end of the month to surprise Wall Street. It will set off a new round of growth.
Constellation Energy (CEG)
Considering most stocks in the Nasdaq 100 are technology stocks, finding a utility amongst them is surprising. That Constellation Energy (NASDAQ:CEG) is also the third-best-performing stock is even more so.
Yet like the chipmakers, Constellation Energy stock is being driven higher by artificial intelligence. Because of the sizeable and growing power needs of data centers, utility stocks generally, and the nuclear power provider specifically, have pushed shares 68% higher in 2024. They have doubled over the past year.
But CEG stock is also down 18% from its all-time high as the rotation out of previous high fliers continues. It is not just reserved for tech names. That does not mean Constellation is not still a buy. AI demand isn’t easing up, hyperscalers are building more data centers, and nuclear energy is a cheap form of electricity. Consider this pullback the pause that refreshes before the utility goes on to new highs.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.