This year—and the one before it—delivered impressive gains for investors in American markets. The S&P 500 index, a barometer of market performance, climbed over 25% in consecutive years, providing significant returns. Such streaks are rare in the history of the U.S. stock market, with the last comparable run occurring in the late 1990s, when the index posted five consecutive years of over 20% gains. That era ended with the dot-com crash.
The sustained boom of the late 1990s was fueled by the rise of the Internet, which captivated investors and drove market optimism. Today, a similar phenomenon seems to be unfolding with the meteoric rise of artificial intelligence (AI). Analysts are divided between those who believe AI represents a transformative event on par with the Internet and those who argue AI’s impact will far surpass that of the Internet. Either way, investors are reaping the rewards.
The S&P 500’s performance has been heavily influenced by AI-driven market excitement, as companies engaged in AI or its applications carry significant weight in the index. While the focus on AI benefits many firms, others that lack AI integration have struggled to match their competitors' success.
How do Israeli companies fit into the AI frenzy?
Surprisingly, Israeli companies listed in the U.S. market have not experienced the same level of AI-driven growth. This might be attributed to the limited presence of a robust AI industry in Israel, which currently leans more toward cybersecurity as its technological strength.
Here’s a closer look at some of the most intriguing companies of 2024, showcasing both the highs and lows:
Palantir Technologies
Palantir epitomizes the AI-driven growth phenomenon more than most. This U.S.-based defense technology company, now valued at over $180 billion, saw its stock soar by an astonishing 360.57% since the beginning of the year—an average of 30% per month. While Palantir has delivered excellent business results, much of the investor enthusiasm stems from the company’s innovative AI applications in its products. Investors’ excitement is so strong that the stock consistently surpasses analysts’ price targets.
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Nvidia
Nvidia has become synonymous with AI. The company dominates the global AI chip market, producing nine out of ten AI chips sold worldwide. Its powerful processors are integral to the massive data centers underpinning the AI industry. This reliance propelled Nvidia’s stock up by 176.66% this year. While Palantir leads in stock price growth, Nvidia’s $3.36 trillion market capitalization places it in a different league, sharing the upper echelon with Apple and Microsoft.
GeneDx
Meet 2024’s top-performing stock: GeneDx, a genomic testing company specializing in identifying genetic syndromes in embryos. Its stock skyrocketed by an eye-popping 2,738.18%, with a market cap now at $2.14 billion. However, the reasons for this meteoric rise remain unclear. While GeneDx controls 80% of the exome testing market, its annual revenues of $250 million don’t indicate the kind of explosive growth one might expect to justify such a dramatic stock price increase.
Teva Pharmaceuticals
Teva reclaimed its title as the Israeli company with the highest market cap on Wall Street, now standing at $25.8 billion. It hasn’t been an easy journey—Teva weathered leadership crises, legal battles, and financial challenges. But last year marked a turnaround, driven by favorable deals in the generic drug market and heightened expectations for its proprietary drug portfolio. Teva’s stock surged 118.75% this year, revitalizing investor confidence.
Lemonade and Hippo
These Israeli-founded digital insurance companies have become barometers for market sentiment. After debuting on U.S. exchanges at inflated valuations during the Israeli tech boom, their stock prices crashed, symbolizing the burst of the startup bubble. However, this year brought a reversal. Lemonade’s stock climbed 144.27%, while Hippo outperformed with a 200% increase. Analysts attribute these gains to shifts in the U.S. insurance market, growth in the cyber insurance sector, and the deep integration of AI into their products.
Wix
Once the poster child of Israeli high-tech, Wix’s rapid early growth gave way to years of stagnation. But 2024 marked a comeback. Competing with giants like Shopify and GoDaddy, Wix has refocused its business strategy, forming partnerships with large enterprises and independent developers, alongside rolling out AI tools to enhance customer efficiency. These moves fueled revenue and profit growth, pushing its stock up 77.45% this year.
Mobileye
Mobileye’s story is compelling—not because of its AI-driven success but because it has struggled despite its advanced AI technology. A pioneer in autonomous driving systems, Mobileye faces stiff competition from other players leading the market. The company’s history includes a startup success story, a NASDAQ listing, an acquisition by Intel, and a subsequent spin-off. However, 2024 was not Mobileye’s year. The stock plunged by 53.76%, driven by cost-cutting measures and market slowdown. Some argue Intel’s ownership has become a burden for Mobileye amid Intel’s own challenges.
Eco Wave Power
Let’s end on an inspiring note with Eco Wave Power, a company making waves—literally. This Israeli firm developed technology to generate energy from ocean waves and began a pilot project in Jaffa Port, which later expanded to collaborations with Israel Electric Corporation and international projects in Portugal and the U.S. American investors loved the combination of sustainable energy innovation and strong performance, pushing the stock up over 1,000% at one point, finishing the year with a 961.29% gain. If only all investments could deliver such results!