Author: Daniel Sparks | July 16, 2018
2018 has featured lots of volatility in the stock market. Indeed, the market fell more than 3% at several points during the year. And at the time of this writing, the S&P 500 is up about five percentage points. Of course, this percentage change could easily fluctuate by the time you're reading this.
But not all stocks have seen a similarly underwhelming year so far. In fact, a handful of stocks are obliterating the overall market's performance. Here are 10 big winners with gains ranging from 22% to triple digits year-to-date.
The best performers in this list may shock you.
1. Microsoft: up 22%
Microsoft (NASDAQ: MSFT) has handily outperformed the S&P 500's five-point year-to-date gain, rising 22% during this same timeframe. In 2018, Microsoft's impressive results have further displayed how the company's transition to a cloud-centric business model since CEO Satya Nadella took over in 2014 is paying dividends.
Microsoft is benefiting from massive growth in its commercial cloud revenue, or a revenue category that primarily consists of Azure, Dynamics 365, and Office 365 commercial. Commercial cloud revenue in the company's most recent quarter increased 58% year over year and accounted for 22% of the period's total revenue. Azure, Microsoft's enterprise cloud service, has been a particularly strong growth driver for Microsoft's commercial cloud revenue. In Microsoft's most recent quarter, Azure revenue jumped 93% year over year.
2. Intuit: up 35%
Intuit (NASDAQ: INTU) -- the company behind TurboTax and QuickBooks Online -- has reassured investors that its growth story is still in its early innings. The company's revenue and operating income have been rising by double-digit rates on a year-over-year basis, helped by soaring growth in QuickBooks Online (QBO) subscribers. QBO subscribers jumped 45% year over year in the company's most recent quarter.
Reaffirming the company's momentum, management recently gave its revenue guidance for the full year a significant boost. Management forecast 14% to 15% year-over-year revenue growth in fiscal 2018, up from a previous outlook for 9% to 11% growth.
Intuit's strong performance has helped shares gain 35% year-to-date.
3. Salesforce: up 45%
Salesforce's (NYSE: CRM) notable 45% year-to-date gain comes as the company consistently delivers strong growth and repeatedly increases its guidance for the full year. Capturing the company's momentum, the customer relationship management cloud-based platform company reported a 25% year-over-year increase in first-quarter revenue and a 79% increase in adjusted non-GAAP earnings per share.
Given the company's strong performance so far, management has increased its outlook for its fiscal 2019 period several times. Initially expecting revenue between $12.45 billion and $12.5 billion during the fiscal year, management now expects revenue to be between $13.075 billion and $13.125 billion.
4. Amazon: up 54%
After the e-commerce company's sharp 56% gain in 2017, Amazon (NASDAQ: AMZN) has continued to impress so far this year. Shares are up 54% year-to-date on the heels of the company's expectation-crushing performance.
Consider Amazon's first-quarter results, which were reported in April. With net sales rising 43% and earnings per share skyrocketing 121% year over year, Amazon smashed consensus estimates for the period. In addition, Amazon's commercial cloud services business, Amazon Web Services (AWS), has continued to deliver outstanding results. First-quarter AWS' net sales increased from $3.7 billion in the year-ago quarter to $5.4 billion -- and AWS' operating income jumped from $890 million to $1.4 billion.
5. Shopify: up 66%
Following Shopify's (NYSE: SHOP) extraordinary 73% year-over-year increase in 2017 revenue, the bar going into 2018 was set high. But 2018 has marked another year of staggering growth for Shopify so far. First-quarter revenue jumped 68% year over year to $214.3 million -- far higher than management's guidance for first-quarter revenue between $198 million and $202 million.
Like many of the companies in this list, Shopify's strong performance led management to significantly increase its outlook for the full year. After initially guiding for full-year 2018 revenue to be between $970 million and $990 million, management said in its first-quarter 2018 update that it now expects full-year revenue to be between $1 billion and $1.01 billion.
Shopify investors have been more than happy with the company's performance, pushing shares up 66% year-to-date.
6. Teladoc: up 88%
It's no wonder Teladoc (NYSE: TDOC) stock is up 88% year-to-date. The virtual healthcare company's revenue has been surging thanks to big increases in paid memberships and visits.
In Teladoc's first quarter, revenue jumped 109% year over year. Excluding the company's acquisition of Best Doctors, organic revenue rose 47% year over year. Teladoc has benefited from a 41% and 57% year-over-year increase in paid memberships and visits, respectively. This put total paid memberships by the end of Q1 at 20.8 million and total visits during the quarter at a notable 606,000.
7. Twitter: up 89%
After reporting fourth-quarter results earlier this year that showed Twitter's (NYSE: TWTR) first profit ever and a return to revenue growth, the social network showed even more strength in its first quarter.
Twitter's first-quarter revenue increased 21% year over year -- a huge bump compared to the company's 2% revenue increase in Q4. In addition, the company swung from a net loss of $62 million in the year-ago quarter to a net profit of $61 million in its first quarter of 2018. All the while, Twitter has sustained six quarters of double-digit year-over-year growth in daily active users.
With shares up 89% year-to-date, investors are applauding Twitter's solid execution.
8. Square: up 94%
Not only has financial-technology company Square (NYSE: SQ) been growing nicely recently, but its already-impressive growth has actually been accelerating for three quarters in a row, leaving Square's first-quarter year-over-year growth in net revenue and adjusted revenue at 45% and 51%, respectively.
On top of its strong growth, Square continues to launch new and compelling products. Its Square Register -- a payment processor for larger businesses that was launched late last year -- is generating average gross payment volume above $300,000. In addition, Square's recently announced new platform for restaurants looks promising.
Square stock has risen 94% year-to-date.
9. The Trade Desk: up 107%
Most of The Trade Desk's (NASDAQ: TTD) 107% increase this year can be attributed to two big jumps after the company's last two earnings releases. Crushing analysts' expectations both times, shares of the digital advertising platform company increased about 20% after the company reported its fourth quarter results in February and soared 40% following its first-quarter earnings release in May.
The company's momentum is undeniable, so much so that in the beginning of June I called The Trade Desk my top stock to buy. The company's first-quarter revenue and non-GAAP earnings per share increased 61% and 89% year over year, respectively. Further, a few areas of The Trade Desk's business have demonstrated some extraordinary momentum. Gross spending on first-quarter connected TV ads increased more than 2,000% year over year and spending on audio increased 650%.
Putting the icing on the cake, The Trade Desk maintained its impressive 95% customer retention rate during its most recent quarter.
10. Netflix: up 115%
Then there's streaming-TV giant Netflix (NASDAQ: NFLX). As if its 55% rise in 2017 wasn't already impressive enough, shares are up an enormous 115% year-to-date. The gain comes as the company seems to be executing shrewdly on every front.
A look at Netflix's first-quarter results helps show why investors have been so bullish on the company's stock. After management guided for a 42.6% year-over-year increase in first-quarter revenue and 6.35 million net streaming member additions, Netflix was able to instead grow revenue by 43.2% and increase members by 7.41 million.
Showing how impressive this growth is, Netflix's 43.2% increase in streaming revenue was the fastest pace the company's streaming business has ever grown.
A good year for tech
One commonality of all of these companies is their significant dependence on technology. To this end, it's generally been a solid year for many tech stocks. Therefore, though each of these businesses has been performing very well, investors shouldn't attribute all of their gains to their respective underlying business performance. Intuit, Shopify, Salesforce, and Square's gains, for instance, seem to be a part of a broader run-up of software-as-a-service stocks.
Further, it's important to keep in mind that past outperformance certainly doesn't guarantee more of the same in the future. That said, it often makes sense to buy companies that are firing on all cylinders -- so this list of stocks may be worth a closer look.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool’s board of directors. LinkedIn is owned by Microsoft. Daniel Sparks owns shares of Square. The Motley Fool owns shares of and recommends Amazon, Intuit, Netflix, Salesforce.com, Shopify, Square, The Trade Desk, and Twitter. The Motley Fool recommends Teladoc. The Motley Fool has a disclosure policy.