The Nasdaq MarketSite in the Times Square neighborhood of New York, on Tuesday, May 31, 2022.
Michael Nagle | Bloomberg | Getty Images
Tech stocks rebounded from a disastrous 2022 and lifted the Nasdaq to one of its strongest years in the past two decades.
After last year’s 33% plunge, the tech-heavy Nasdaq finished 2023 up 43%, its best year since 2020, which was narrowly higher. The gain was also just shy of the index’s performance in 2009. Those are the only two years with bigger gains dating back to 2003, when stocks were coming out of the dot-com crash.
The Nasdaq is now just 6.5% below its record high it reached in November 2021.
Across the industry, the big story this year was a return to risk, driven by the Federal Reserve halting its interest rate hikes and a more stable outlook on inflation. Companies also benefited from the cost-cutting measures they put in place starting late last year to focus on efficiency and bolstering profit margins.
“Once you have a Fed that’s backing off, no mas, in terms of rate hikes, you can get back to the business of pricing companies properly — how much money do they make, what kind of multiple do you put on it,” Kevin Simpson, founder of Capital Wealth Planning, told CNBC’s “Halftime Report” on Tuesday. “It can continue into 2024.”
While the tech industry got a big boost from the macro environment and the prospect of lower borrowing costs, the emergence of generative artificial intelligence drove excitement in the sector and pushed companies to invest in what’s viewed as the next big thing.
Nvidia was the big winner in the AI rush. The chipmaker’s stock price soared 239% in 2023, as large cloud vendors and heavily funded startups snapped up the company’s graphics processing units (GPUs), which are needed to train and run advanced AI models. In the first three quarters of 2023, Nvidia generated $17.5 billion in net income, up more than sixfold from the prior year. Revenue in the latest quarter tripled.
Jensen Huang, Nvidia’s CEO, said in March that AI’s “iPhone moment” has begun.
“Startups are racing to build disruptive products and business models, while incumbents are looking to respond,” Huang said at Nvidia’s developers conference. “Generative AI has triggered a sense of urgency in enterprises worldwide to develop AI strategies.”
‘Relatively early stages’
Consumers got to know about generative AI thanks to OpenAI’s ChatGPT, which the Microsoft-backed company released in late 2022. The chatbot allowed users to type in a few words of text and start a conversation that could produce sophisticated responses in an instant.
Developers started using generative AI to create tools for booking travel, creating marketing materials, enhancing customer service and even coding software. Microsoft, Google, Meta and Amazon touted their hefty investments in generative AI as they embedded the tech across product suites.
Amazon CEO Andy Jassy said on his company’s earnings call in October that generative AI will likely produce tens of billions of dollars in revenue for Amazon Web Services in the next few years, adding that Amazon is using the models to forecast inventory, establish transportation routes for drivers, help third-party sellers create product pages and help advertisers generate images.
“We have been surprised at the pace of growth in generative AI,” Jassy said. “Our generative AI business is growing very, very quickly. Almost by any measure it’s a pretty significant business for us already. And yet I would also say that companies are still in the relatively early stages.”
Amazon shares climbed 81% in 2023, their best year since 2015.
Microsoft investors enjoyed a rally this year unlike anything they’d seen since 2009, with shares of the software company climbing 58%.
In addition to its investment in OpenAI, Microsoft integrated the technology into products like Bing, Office and Windows. Copilot became the brand for its broad generative AI service, and CEO Satya Nadella described Microsoft last month as “the Copilot company.”
“Microsoft’s partnership with OpenAI and subsequent product innovation through 2023 has resulted in a market dynamic shift,” Michael Turrin, a Wells Fargo analyst who recommends buying the stock, wrote in a Dec. 20 note to clients. “Many now view MSFT as the outright leader in the early AI wars (even ahead of market share leader AWS).”
Meanwhile, Microsoft has been cranking out profits at a historic rate. In its latest earnings report, Microsoft said its gross margin exceeded 71% for the first time since 2013, when Steve Ballmer ran the company. Microsoft has found ways to more efficiently run its data centers and has lowered reliance on hardware, resulting in higher margins for the segment containing Windows, Xbox and search.
Microsoft CEO Satya Nadella (R) speaks as OpenAI CEO Sam Altman (L) looks on during the OpenAI DevDay event on November 06, 2023 in San Francisco, California. Altman delivered the keynote address at the first ever Open AI DevDay conference.
Justin Sullivan | Getty Images
After Nvidia, the biggest stock pop among mega-cap tech companies was in shares of Meta, which jumped almost 200%. Nvidia and Meta were by far the two top performers in the S&P 500.
Meta’s rally was sparked in February, when CEO Mark Zuckerberg, who founded the company in 2004, said 2023 would be the company’s “year of efficiency” after the stock plummeted 64% in 2022 due largely to three straight quarters of declining revenue.
The company cut more than 20,000 jobs, proving to Wall Street it was serious about streamlining its expenses. Then growth returned as Facebook picked up market share in digital advertising. For the third quarter, Meta recorded expansion of 23%, its sharpest increase in two years.
Where are the IPOs?
Like Meta, Uber wasn’t around during the dot-com crash. The ride-hailing company was founded in 2009, during the depths of the financial crisis, and became a tech darling in the ensuing years, when investors favored innovation and growth over profit.
Uber went public in 2019, but for a long time battled the notion that it could never be profitable because so much of its revenue went to paying drivers. But the economic model finally began to work late last year, for both its rideshare and food delivery businesses.
That all allowed Uber to achieve a major investor milestone earlier this month, when the stock was added to the S&P 500. Members of the index must have positive earnings in the most recent quarter and over the prior four quarters in total, according to S&P’s rules. Uber reported net income of $221 million on $9.29 billion in revenue for its third quarter, and in the past four quarters altogether, it generated more than $1 billion in profit.
Uber shares climbed to a record this week and jumped 149% for the year. The stock, which is listed on the New York Stock Exchange, finished the year as the sixth-biggest gainer in the S&P 500.
Despite the tech rally in 2023, there was a dearth of new opportunities for public investors during the year. After a dismal 2022 for tech IPOs, very few names came to market in 2023. The three most notable IPOs — Instacart, Arm and Klaviyo — all took place during a one-week stretch in September.
For most late-stage companies in the IPO pipeline, more work needs to be done. The public market remains unwelcoming for cash-burning companies that have yet to show they can be sustainably profitable, which is a problem for the many startups that raised mountains of cash during the zero-interest days of 2020 and 2021.
Even for profitable software and internet companies, multiples have contracted, meaning the valuation startups achieved in the private market will require many of them to take a haircut when going public.
Byron Lichtenstein, a managing director at venture firm Insight Partners, called 2023 “the great reset.” He said the companies best positioned for IPOs are unlikely to debut until the back half of 2024 at the earliest. In the meantime, they’ll be making necessary preparations, such as hiring independent board members and spending on IT and accounting to make sure they’re ready.
“You have this dynamic of where expectations were in ’21 and the prices that were paid then,” Lichtenstein said in an interview. “We’re still dealing with a little bit of that hangover.”
—CNBC’s Jonathan Vanian contributed to this report
Tesla CEO Elon Musk reacts while wearing a cap with the words “Gulf of America” as he attends a cabinet meeting held by U.S. President Donald Trump at the White House in Washington, D.C., U.S., April 30, 2025.
Evelyn Hockstein | Reuters
With his official stint in government coming to an end, Elon Musk thanked President Donald Trump on Wednesday for “the opportunity to reduce wasteful spending.”
Since joining the second Trump administration at the beginning of the term in January, Musk has led the Department of Government Efficiency, tasked with slashing the size of the federal government.
As a so-called special government employee, Musk can work for the administration for 130 days in a calendar year. The end of May marks 130 days since Trump’s inauguration.
“The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government,” Musk wrote.
A White House official who was granted anonymity to describe personnel matters confirmed Musk’s departure and said he will begin offboarding Wednesday night.
Musk was critical of Trump’s spending bill that’s making its way through Congress, saying in a CBS interview set to air June 1 that it “undermines the work that the DOGE team is doing.”
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Musk, the world’s richest person, is CEO of Tesla, SpaceX and artificial intelligence startup xAI. Musk said this week that he plans to focus more on his businesses.
On a Tesla earnings call in April, Musk said that his time spent running DOGE would drop significantly by the end of May. On the same call, he said that he would still spend a “day or two per week” on government work until the end of Trump’s term.
Musk has also said he plans to keep his small office at the White House.
During his first 100 days working with the Trump administration, Musk said in an interview with Fox Digital News that he had worked in Washington, D.C. on his DOGE initiative “7 days a week, or close to 7 days a week.”
Legal risks are now building up for Musk with myriad cases filed in the U.S. alleging that he violated federal laws while leading DOGE.
On Wednesday, pension fund leaders sent a letter to Tesla’s board saying that they should require Musk to put in 40 hours per week, at a minimum, at the EV maker as a condition to attain any future CEO pay package.
Elon Musk interviews on CNBC from the Tesla Headquarters in Texas.
CNBC
Elon Musk needs to spend more time at Tesla as his electric vehicle company faces a “crisis,” according to a letter on Wednesday from a group of pension fund leaders who manage investments in the company.
“Tesla’s stock price volatility, declining sales, as well as disconcerting reports regarding the company’s human rights practices, and a plummeting global reputation are cause for serious concern,” the investors wrote in a letter to Robyn Denholm, the company’s board chair. “Moreover, many issues are linked to Mr. Musk’s actions outside of his role as Technoking and Chief Executive Officer at Tesla, including his high-profile role as an architect of the U.S. Department of Government Efficiency (DOGE).”
The investors want the Tesla board to require Musk to work a minimum of 40 hours per week at the automaker as a condition of any new compensation plan they may arrange for him. They also want a clear succession plan for management of the EV business, and a policy that would apply to all Tesla directors limiting their outside board commitments at public and private companies.
Early last year, the Delaware Court of Chancery ordered Tesla to rescind Musk’s 2018 CEO pay package, which had been worth around $56 billion, finding that Musk controlled the company, and the board’s compensation committee misled shareholders before seeking their vote to approve the plan.
Musk now says he wants even more shares, amounting to 25% voting control of the company.
Tesla’s brand value and reputation have declined since 2024, due largely to Musk‘s incendiary rhetoric and political activities. In addition to pouring nearly $300 million into an effort to get Donald Trump back into the White House, Musk formally endorsed Germany’s far-right AfD party ahead of the country’s parliamentary election this year.
At DOGE, Musk has led an initiative by the Trump administration to slash federal agencies.
Tesla once ranked eighth among the most popular American brands in the Axios Harris Poll of public perceptions of the 100 most visible U.S. companies. But recently, Tesla dropped to 95th, behind six other automakers in that poll.
Tesla’s stock price is down 12% this year, while the Nasdaq is down just 1%.
Data this week revealed that Tesla’s monthly sales across Europe plunged by nearly half in April compared to the same time last year. That trend extends the steep declines Tesla saw in the first quarter.
The investors who signed Wednesday’s letter own about 7.9 million shares in the company combined. They blamed a Tesla board that’s “unwilling to act in the best interest of all Tesla shareholders” by requiring Musk’s “full-time attention” on the company.
Musk said this week that he plans to focus more on his businesses, which include xAI and SpaceX in addition to Tesla.
Those who signed the letter included the pro-labor SOC Investment Group, American Federation of Teachers, New York City Comptroller Brad Lander and Oregon State Treasurer Elizabeth Steiner.
The investors asked Tesla to add at least one new independent director with no personal ties to other board members. Tesla earlier this month said former Chipotle CFO Jack Hartung will join the company’s board. Hartung previously worked with Musk’s brother and Tesla board member Kimbal Musk, who was a board member at the Mexican food chain.
Tesla didn’t respond to a request for comment in response to the letter.
Meta CEO Mark Zuckerberg appears at the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.
David Paul Morris | Bloomberg | Getty Images
Meta’s AI assistant now has 1 billion monthly active users across the company’s family of apps, CEO Mark Zuckerberg said Wednesday at the company’s annual shareholder meeting.
The “focus for this year is deepening the experience and making Meta AI the leading personal AI with an emphasis on personalization, voice conversations and entertainment,” Zuckerberg said.
The artificial intelligent assistant’s 1 billion milestone comes after the company in April released a standalone app for the tool.
The plan is for Meta to keep growing the product before building a business around it, Zuckerberg said on Wednesday. As Meta AI improves overtime, Zuckerberg said “there will be opportunities to either insert paid recommendations” or offer “a subscription service so that people can pay to use more compute.”
In February, CNBC reported that Meta was planning to debut a standalone Meta AI app during the second quarter and test a paid-subscription service akin to rival chat apps like OpenAI’s ChatGPT.
“It may seem kind of funny that a billion monthly actives doesn’t seem like it’s at scale for us, but that’s where we’re at,” Zuckerberg told shareholders.
During the Meta shareholder meeting, investors voted on 14 different items related to the company’s business, nine of which were shareholder proposals covering topics such as child safety, greenhouse gas emissions and a proposed bitcoin treasury assessment.
Shareholder proposal 8, for example, was submitted by JLens, which is an investment advisor and affiliate of the Anti-Defamation League, and called for Meta to prepare an annual report detailing and addressing hate content, including antisemitism, on its services following January policy changes that relaxed content-moderation guidelines.
Early voting results on Wednesday showed the proposals that Meta’s board did not recommend were unlikely to pass, including one calling for the company to end its dual-class share structure, which gives Zuckerberg significant voting power. Meanwhile, the voting items that the board favored, including those pertaining to approving the company’s board of director nominees and an equity incentive plan, were likely to pass, based on the preliminary results.
Meta said final polling results will be released within four business days on the company’s website and the U.S. Securities and Exchange Commission.