Markets

Apple and AMD were the best stocks of 2019

Key Points
  • Apple and Advanced Micro Devices are the biggest winners in two major stock market indexes this year.
  • The S&P 500 is up nearly 30% for the year, and the Dow Jones Industrial Average has risen more than 22%.
  • Semiconductor stocks make up many of the best performers for the year.

Major stock indexes are up huge in 2019 thanks in large part to the success of some key technology stocks.

Apple led the way for the Dow Jones Industrial Average, gaining roughly 84% so far.

For the S&P 500, it was Advanced Micro Devices that took the crown, rising more than 150% since the start of January for the biggest gain in that benchmark.

Overall, the S&P 500 is up nearly 30% for the year, and the Dow Jones Industrial Average has risen more than 22%.

Apple's $1 trillion year

The strong year for Apple pushed the company's market cap back over the $1 trillion mark. The consumer tech giant has seen modest success with its core iPhone business this year, topping estimates in its most recent quarterly report even as sales slow. The pending arrival of Apple's 5G iPhones in 2020 has some analysts projecting a major upgrade cycle and sales boost for the company.

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But it was other revenue streams that got investors excited this year. And the wearables and services segments could make even more strides in the coming years. Apple has already seen success with its AirPods, selling an estimated $6 billion worth of the earbuds in 2019, according to analyst Toni Sacconaghi of Bernstein.

AMD's banner year

AMD is just one of several chipmakers that have posted a banner year on booming demand for data centers and niche areas like gaming. Lam Research is up more than 115%, and KLA has nearly doubled as well. The strong year for semiconductor stocks has confused some of the top analysts covering the industry, as it came amid a barrage of trade war news that clouded the near-term outlook for companies.

The highest price target on Wall Street for AMD is from RBC Capital Markets. RBC analyst Mitch Steves values the stock at $53 per share, nearly a 15% premium to where the stock closed Friday.

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"As Data Center demand ramps up and gaming sales come in better than feared, as we expect, this should lead to higher gross margins relative to current Street expectations," Steves said in a note to clients last week.

Steves is not alone in being bullish on AMD, and Apple has the backing of several Wall Street analysts as well. According to FactSet, 57% of analysts have a buy rating on Apple, while 38% have one for AMD.

However, both stocks are trading above their average analyst price targets, according to FactSet, pointing to the possibility that the shares are overdue for a pullback.

— CNBC's Michael Bloom contributed to this story.