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The S&P 500 communication services sector has witnessed strong growth this year, driven by positive earnings and enthusiasm over the promise of artificial intelligence.
Communication services (SP500-50) emerged as the second-best performing segment among the 11 S&P 500 sectors, gaining 26% in the first half of 2024. The sector has reached 35 new highs in the first-half, hitting a 52-week high of $316.15.
The Communication Services Select Sector SPDR Fund (NYSEARCA:XLC), which tracks S&P 500 communication services sector, hit a high of $87.02 and managed 31 times high in the first 6 months.
AI craze
A frenzy over AI continued in full force in the first half of 2024, with the mega-cap names delivering outsized gains. Google (GOOG) and Meta (META) among the Magnificent 7, recorded gains of 30% and 42%, respectively in the first two quarters of 2024.
AI’s meteoric rise pushed these four communication stocks to hit an all-time high:
- Meta Platforms (META) and Alphabet (GOOG), which belongs to Interactive Media & Services group, hit an all-time high of $531.49 and $186.05 respectively.
- News Corp (NWSA) from media industry also hit an all-time high of $28.00 and T-Mobile US (TMUS) from wireless telecommunication services peaked to its highest level at $182.67.
Meanwhile, media firm Paramount Global Class B (PARA) seems to have been struggling, with the stock down 26% in the first-half of the year.