Enormous eight crushing the market

Artificial intelligence (AI) hype and a bullish tech market have helped the enormous eight – Nvidia, Meta, Tesla, Amazon, Apple, Netflix, Microsoft, and Alphabet (Google) – outperform the market in 2023.

Most large-cap tech companies had a difficult 2022, with rising interest rates and recession fears weighing on their performance and stock prices.

However, they rebounded in 2023 on the back of an AI revolution which pushed companies like Nvidia and Microsoft to the forefront.

ChatGPT was the main driver of the AI hype when it rose to prominence over the last year. Since then, many companies unveiled impressive AI services.

Microsoft launched a new AI offering, dubbed Copilot, which integrates into Windows 11, Microsoft 365, Edge, and Bing.

Users can use Copilot to get AI assistance in nearly all aspects of their workflows on the different Microsoft applications.

For example, Copilot can generate text and tables in Word, summarise and draft emails in Outlook, and generate Python visualisations in Excel.

Not to be outdone, Google unveiled Duet AI, a direct competitor to Microsoft’s Copilot, in late August.

Duet AI integrates into Google’s Workspace and can be used with applications like Google Docs, Slides, Meet, Gmail, and Chat.

Meta, Apple, and Amazon are also investing heavily in AI to enhance their current offerings.

Nvidia benefitted from the AI hype as the company’s graphics processing units dominate the AI chip market.

Nvidia’s share price increased by 183% in 2023 on the back of impressive financial results with a positive outlook.

Meta, which had a terrible 2022 with its share price plummeting on lacklustre results, bounced back in spectacular fashion.

Meta’s share price increased 130% year-to-date, breaching $300 per share for the first time since 2021.

The rest of the enormous eight – Tesla, Amazon, Microsoft, Apple, Netflix, and Google – also achieved strong growth this year.

A comparison between R1,000 invested in an equally weighted index of the Enormous Eight and the S&P500, shown in the chart below, shows how much these companies outperformed the market.

Enormous Eight performance in 2023

The table below shows the share price performance of Nvidia, Meta, Tesla, Amazon, Apple, Netflix, Microsoft, and Google in 2023 year-to-date.