November was a huge month for stocks. Palantir, Axon, and Super Micro Computer were the top performers.
In a year where the bulls are running and the S&P 500 is up some 26% year-to-date, November finished as the best month of the year – so far.
The S&P 500 gained 5.7% in November, a month that averages a 1.4% return historically. It was the best monthly return this year, topping May, which saw a 4.9% gain. On Monday, the S&P 500 closed at an all-time high of 6,047.
As strong as November was for large caps, it was even better for small caps as the Russell 2000 rose 10.8% last month. It was also good for technology stocks as the Nasdaq Composite rose 6.2% in November. The Dow Jones Industrial Average lagged with a 2.6% monthly return.
A confluence of factors boosted markets in November, including declining inflation, a strong economy, lower interest rates, and the election of Donald Trump as U.S. president, who is considered pro-market and likely to deregulate.
Here are the top three stocks on the S&P 500 last month.
1. Palantir Technologies, up 61%
Palantir Technologies (NASDAQ:PLTR) stock soared 61.4% in November and is now up some 307% year-to-date to $70 per share.
There were several catalysts that drove Palantir last month, starting with its earnings report. The enterprise cybersecurity posted record revenue of $726 million in Q3, a 30% year-over-year increase, while net income jumped 100% to $143 million, or 6 cents per share.
Palantir also raised its guidance for the fourth quarter and full fiscal year, calling for record revenue in Q4. Palantir CEO Alexander Karp attributed the strong growth to “unrelenting AI demand that won’t slow down.”
Palantir has been on an incredible run, up 308% YTD. But its P/E ratio has soared to a ridiculous 331, with forward earnings of 144 times earnings.
2. Axon Enterprise, up 52%
Axon Enterprise (NASDAQ:AXON) stock was the second best performer on the S&P 500 as its stock price surged 52.6% in November. It has now gained 150% YTD and is trading at around $647 per share.
Axon develops technology and weapons products for law enforcement and the military, including body cams, dashboard cameras, and tasers.
Axon has been a rapid grower, producing at least a 30% revenue gain in the first three quarters of the year. In Q3, Axon saw revenue spike 32% to $544 million while net income jumped 9% to $67 million, or 89 cents per share.
The firm is also calling for revenue of $560 million to $570 million in Q4, which would be 32% growth at the midpoint. Axon also raised its guidance for the full year, targeting $2.07 billion in revenue, which would be 32% growth. The company also boosted its adjusted EBITA for the full year from a range of $460 million to $475 million to $510 million.
Axon also got a lift in November when it signed a contract with the Royal Canadian Mounted Police to provide body cams.
3. Super Micro Computer, up 44%
Super Micro Computer (NASDAQ:SMCI) stock surged 44% in November, making it the third best performer last month.
Supermicro, which makes servers for data centers, has been extremely volatile this year. The stock price skyrocketed to $118 per share in March, fueled by the AI boom. But then it crashed to below $17 per share in mid-November due to governance and internal controls concerns that led to threats of delisting from Nasdaq.
Supermicro failed to file its annual report and Q1 earnings due to these concerns, and Nasdaq threatened to delist the stock for non-compliance.
However, the stock rose sharply after the company informed Nasdaq that it planned to file those reports. It also climbed after the company’s investigation revealed that no fraud or misconduct took place.
Investors jumped on this dirt-cheap AI stock, which has massive earnings power as a leading provider of AI-enabled servers for data centers. It is currently up 42% YTD and is trading at just 12 times forward earnings.
