These stocks won February — but it may be time to dump 2 popular tech plays
Some stocks were able to avoid February’s downturn. But that doesn’t mean they’ll kept that upward strength long term. The S & P 500 is on track to end the month down more than 2%, marking a turn from the best January for the broad market index since 2019. Despite the downturn, some stocks were able to buck the trend and post gains of more than 20%. Still, investors should be careful when looking at the biggest winners this month because some of those top stocks aren’t expected to continue rallying. Just two of the 10 stocks on the list are expected by analysts to add more share value over the next 12 months as a whole than they did in the month of February alone. And analysts expect one well-known technology stock to fall over the next year despite posting one of the biggest gains this month. CNBC Pro screened FactSet for the best performers this month. Here are the top 10: A chunk of chipmaker Nvidia ‘s gains came last week following its quarterly report , when it recorded beats for revenue and per-share earnings. The company also issued expectations for first-quarter revenue that was above the consensus estimate of analysts polled by FactSet. Revenue from the business unit housing its AI chips grew 11% year over year, bolstering hopes that the company will benefit from the intensifying focus on the technology. Electric-vehicle maker Tesla rose earlier in the month, helped by an expansion of the Treasury Department’s definition of SUVs that makes more electric vehicles eligible for federal tax credits. Tesla’s advances in January and February marked a turn from 2022, when it fell 65% amid CEO Elon Musk’s chaotic purchase of Twitter. But Wall Street isn’t sure that this growth can continue. Nvidia is expected to gain just 4% over the next year after adding slightly over 20% in February alone, according to the average analyst’s upside target. Tesla, which also added around 20% in the month, is poised to fall 5% over the next 12 months from where it closed Monday. Both have buy ratings from more than half of analysts. Other top performers have better outlooks on the Street. Pharmaceutical company Catalent was helped by reports of buyout interest from Danaher early in the month. The company also reported mixed earnings for its second fiscal quarter, with per-share earnings coming in below the consensus estimate of analysts polled by FactSet while beating expectations for revenue and adjusted EBITDA. Catalent also reiterated its full-year guidance. The stock was the top performer this month, gaining more than 25%. Just over half of analysts rate the stock a buy, with the average analysts expecting its shares to add another 21.7% over the next 12 months. Meta Platforms and Fortinet are the only two among the top 10 performers expected to add more share value over the next year than each did in February alone. META FTNT 1M mountain Month chart Both technology companies rose early in the month. Investors specifically liked Facebook-parent Meta’s $40 billion stock buyback. While Fortinet posted mixed quarterly earnings, it was able to provide guidance for the current quarter and upcoming year that was largely in line or slightly above analysts’ expectations, according to FactSet. Meta is expected to gain the most of the 10 best performers over the next year at 21.8%, with slightly more than half of analysts rating the stock a buy. Similarly liked by just over half of analysts, Fortinet’s average price target implies the stock could gain another 19.3% over the next 12 months.
