Meta Platforms and Nvidia both suffered heavy losses last year, but their stock prices have doubled this year!

Since January 2023, Meta Platforms and NVIDIA have risen by more than 100%, becoming the two best-performing stocks in the S&P 500 index, while many investors had previously expected 2023 to be a difficult year for US stocks.

The S&P 500 index has risen by 8% so far this year, with the ultra-high gains of Meta Platforms, NVIDIA, and a group of other tech stocks almost contributing to the entire return of the index.

Why did Meta Platforms and NVIDIA skyrocket?

Social media giant Meta Platforms has risen by 102% this year, thanks to investors' trust in Zuckerberg's "year of efficiency" cost-cutting plan, which includes laying off tens of thousands of employees to improve profits.

At the same time, NVIDIA's stock price has risen by 106% in 2023, benefiting from people's increasing interest in technologies such as ChatGPT.

In addition to cost-cutting and the rise of ChatGPT, Meta Platforms and NVIDIA may also benefit from investors' increasing belief that the Fed is about to end its war on inflation.

The FedWatch tool shows that more than 70% of traders believe that the Fed's May meeting will be the last rate hike of this cycle.

When the Fed stops raising interest rates, listed companies don't have to worry so much about their borrowing costs rising. This is often particularly beneficial for growth stocks, as it will boost future expected cash flows, which is a core part of growth stock valuations.

In 2022, due to the Fed's aggressive rate hikes to curb soaring prices, Meta Platforms and NVIDIA's stock prices plummeted by 61% and 45%, respectively.