The S&P 500 has been on fire in 2024, reaching new highs and breaking through the 5,500 level. However, as the second half of the year approaches, there are a few names in the index that could be in danger of falling from grace. Despite the overall bullish sentiment in the market, some high-flying stocks might face pressure due to consensus price targets. Analysts are cautious about the future performance of certain companies, based on their current valuations.
Nvidia, a leader in the artificial intelligence sector, has seen its stock price more than double in 2024, driven by investor enthusiasm surrounding AI technologies. The company briefly became the most valuable public company, surpassing Microsoft in market cap. However, analysts are concerned that Nvidia may have reached its peak, with price targets suggesting a potential 11% pullback. Rising competition in the AI industry could pose a threat to Nvidia’s future growth, despite its current popularity among investors.
Another beneficiary of the AI boom, Qualcomm has seen its stock climb nearly 47% in 2024. The chipmaker delivered strong quarterly results and optimistic guidance, fueled by demand for advanced chips in premium smartphones. However, analysts warn that Qualcomm’s stock may have become overvalued, with price targets indicating a possible 14% decline ahead. As chip stocks continue to perform well, Qualcomm’s future success remains uncertain.
In addition to Nvidia and Qualcomm, other companies in the S&P 500 are also at risk of experiencing a downturn in the coming months. Garmin and Teradyne are among the stocks that analysts have flagged as potential fallers, based on current market conditions. The VanEck Semiconductor ETF has surged 51% in 2024, highlighting the strength of the chip sector. Investors should remain cautious and keep a close eye on these and other stocks that could face headwinds in the near future.
While the S&P 500 continues to soar to new heights, investors should be mindful of the risks associated with certain individual stocks. The second half of 2024 could bring increased volatility and potential pullbacks for companies that have experienced rapid growth. It is essential for investors to conduct thorough research and closely monitor market developments to make informed decisions about their investment portfolios.