Stock Market: Winners and losers in May

Yahoo Finance markets reporter Josh Schafer discusses the top stock market winners and losers in the month of May, including Nvidia, Tesla, and Urban Outfitters.

Video Transcript

[AUDIO LOGO]

JULIE HYMAN: It is the final trading day of May. And the tech heavy NASDAQ saw gains of about 7% this month. The Dow though was dragged down over debt ceiling negotiations. So let's recap some of the biggest stock winners and losers of the month with Yahoo Finance's markets reporter Josh Schafer. Josh, what do we got?

JOSH SCHAFER: Yeah, guys, so when thinking about winners and losers, I was thinking about some of the themes we've been talking about over May, right? And so we're going to talk about these winners first. We're going to go AI, right? So you have Nvidia, Tesla, which some are saying is an AI play to some extent, At least we start from Cathie Wood is. And then you have Urban Outfitters which is sort of the consumer side of what May earnings was.

And I want to talk about Nvidia first, because Nvidia obviously surprising the street last week with their earnings release, essentially coming out and saying that they expect to make more money off AI than anyone had initially anticipated and significantly more than Wall Street analysts had anticipated, right? You can see that stock now for the last month up over 40%, really driving that rally that we've seen specifically in the NASDAQ and in AI plays over the last month.

Then you take a look at Tesla and what Tesla has done over the last month. Tesla up about over 20% in the month of May, also on some AI hopes I do think to some extent, right, in that tech rally. But also positive news for Tesla, a new partnership with Ford. Ford will be using their superchargers. Also positive news out of China, sparking Tesla's run. I think also just interesting to see the open optimism that now is in that tech sector and in a play like Tesla that maybe wasn't there a couple of months ago, especially with a potential Fed rate hike coming in June. Tesla was not the kind of stock that people were maybe buying when talking about Fed rate hikes going back a few months ago.

Then you take a look at Urban Outfitters. Urban sort of shows the story up about 16% for the month. And this is the story the resilient consumer that we saw in the month of May. We were all waiting for consumer slowdown during this earnings season. It never really came, at least not fully. There were some warnings about discretionary spending. But investors have still found some winners in that retail category. And Urban seems to be one of them where people are still choosing to spend their money there.

Now when you take a look at losers, there have been losers in the AI space too. That's why we highlight Chegg here. There's also just regular earnings losers that disappointed Wall Street like Paramount. And then there's Peloton, which hit an all time low in May.

Starting with Paramount, Paramount down almost 30% in the month, and really what that was driven by was an earnings disappointment. They're still continuing to lose more money than investors had hoped with that streaming platform. New research out in the last couple of days from Wall Street analysts, pointing to overall Paramount just might not have as big of a total market in that streaming space as some had hoped. So be interesting to see how that plays out when we continue to talk about the streaming wars.

Take a look at Chegg. Chegg down over 40%, nearly 50% in the last month. You remember Chegg earnings call was pretty much all about AI and how AI is taking some of their customers. So they plan to partner with ChatGPT. But really, investors weren't that excited about that because now you're relying on someone else's technology to sort of build out your growth story, not normally a positive on Wall Street.

The final one I wanted to highlight here is Peloton because I do think it's interesting. We've seen this resurgence in the NASDAQ, resurgence and some tech kind of stocks that were popular over COVID. But still, fundamentals are driving things here for a stock like Peloton. Peloton projecting that they're going to see subscribers decline for the first time on a quarterly basis in the next quarter or could see that happen. Also they had that malfunction with the bike. And as I said, the malfunction with the bike in the seat forced Peloton to hit its all time low, the stock off slightly today. But it's been a rough ride downhill I guess you could say for Peloton.

JULIE HYMAN: Oh, you could say that.

BRAD SMITH: Oh, Josh.

JULIE HYMAN: Mr. Puntster.

JOSH SCHAFER: Always use that one. Always use that one.

JULIE HYMAN: Thanks, Josh.

BRAD SMITH: I was taking notes during your hit, Josh. If there's anything I took away, it's people clipping out of Peloton. People also have a lot of this AI fervor right now, a little bit of froth. And then lastly people still buying holey shirts over at Urban Outfitters as well for the summer.

JULIE HYMAN: They sell holey-- is that a thing?

BRAD SMITH: Oh, yeah, lots of holes in the shirts, yeah.

JULIE HYMAN: Huh.

JOSH SCHAFER: Urban Outfitters shirt on a Peloton using AI.

BRAD SMITH: It breathes well.

JOSH SCHAFER: The month of May in a moment.

BRAD SMITH: Love it. Josh, thank you so much for breaking that all down here over the course of not just the earnings season, but the month of May for sure.