The resilient U.S. economy paid dividends for many companies in Oregon and southwest Washington this year, with the stock market rising sharply and taking some of the region’s biggest stocks along for the ride.
U.S. stocks climbed by nearly 25% in 2023, as measured by the S&P 500 market index. That reflects an economy much stronger than many forecasters anticipated, thriving amid a considerable slowdown in inflation. With price hikes tailing off, investors anticipate interest rates will fall in the coming year.
Lower borrowing costs are poised to spur an uptick in business investment and improve household finances. Investors began buying up stocks late in the year, anticipating even better times ahead.
WINNERS
No Oregon stock gained more in dollar terms in 2023 than Intel, whose market value soared by more than $100 billion in the past year, reflecting a 90% jump in its share price.
Intel’s headquarters are in California, but its largest operations are in Washington County, where the chipmaker employs more than 22,000. So the big jump in share price is very meaningful to Oregon’s economy, especially because stock grants are a major part of Intel employees’ compensation package.
Investors soured on Intel beginning in 2021 as the cooling global economy held down PC sales and as the company sought to overcome years of technological failures. CEO Pat Gelsinger’s plan for overcoming the technical lapses — spending tens of billions of dollars on engineering and new factories — pushed Intel into the red. The company’s shares lost half their value in 2022.
But Intel surprised investors this fall with a sales forecast much rosier than Wall Street anticipated, and the company has secured billions of dollars from governments in Germany, Israel and Ohio — plus $115 million from Oregon — to help pay for the new factories. (Intel is still waiting to learn whether it will receive a share of federal semiconductor subsidies approved by Congress in 2022.)
While Intel continues to lag rival Nvidia in the race to engineer chips for artificial intelligence, computing’s hottest market, investors are warming to Intel’s long-term prospects, and many now believe in its turnaround story.
In percentage terms, no regional company performed better in 2023 than Vancouver-based biotech company Absci. It’s using artificial intelligence to speed the development of new drugs known as biologics.
Absci is still proving its technology and so investing in the business is the kind of gamble Wall Street resists during down times. Absci shares lost 74% of their value during 2022.
Investors took a second look at Absci this past year, though, as the stock market improved and after the Vancouver company announced a string of development deals with big-named businesses including AstraZeneca. Absci’s share price doubled, though its stock is still worth about a quarter of its initial offering price in 2021.
Beaverton-based Digimarc, a longtime Oregon tech company now focused on digital watermarking, was also among the region’s best performers this year. Digimarc is small and hasn’t posted an annual profit since 2012, but it is adding subscribers for its technology services and attracting some renewed investor interest. Shares were up 95% this past year.
Other top regional stocks during 2023 include Medford-based auto dealer Lithia Motors and Camas-based laser manufacturer nLight.
Lithia’s stock, up 61% this year, recorded most of its annual gains in just the last three weeks as new federal data showed cooling inflation and as the Federal Reserve indicated it plans to begin cutting interest rates next year. Lower interest rates reduce the cost of buying cars and trucks, which stands to benefit Lithia’s chain of 345 dealership locations.
While nLight’s sales were down 19% through the first nine months of the year, the company announced new deals this fall that improved its outlook for the foreseeable future. Its stock price rose by a third in 2023.
LOSERS
Several other regional stocks lost value during 2023 – some quite a bit.
Both Nike and Columbia Sportswear declined modestly this past year amid signs of cooling consumer demand.
Nike acknowledged last week that it has been quietly laying off employees amid flat sales and set plans to shore up its finances with $2 billion in cost cuts. Analysts and customers say Oregon’s largest company has lost its edge in footwear innovation. Its shares were down about 7% during 2023.
The region’s biggest losers were young, ambitious companies that hit the stock market before they had built durable businesses.
Vacasa’s value dropped by two-thirds during 2023 as it became apparent the Portland company has fundamental issues with its business marketing and managing vacation rentals. Vacasa laid off 1,300 employees at the start of the year, 17% of its workforce, as it sought to overhaul its cost structure.
The vacation rental market has cooled from its pandemic-era peaks and Vacasa’s revenue – which has been growing rapidly – fell by 3% in the first nine months of 2023.
But shares of other vacation rental companies like Airbnb and VRBO owner Expedia were up sharply this past year. Vacasa has indicated it has additional, operational problems that it is working to overcome.
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Portland-based NuScale Power, which is developing a line of small nuclear reactors, shed two-thirds of its market value. Last month, NuScale abandoned plans to build power plants in Idaho for a coalition of regional utilities. That amplified longstanding doubts about the market for NuScale’s technology, initially developed at Oregon State University.
Another Portland company, Expensify, dropped by more than 70% this year as the corporate expense management business reported a series of disappointing financial results.
Oregon’s worst-performing stock in 2023 was also the region’s worst-performing last year: Eugene-based Arcimoto. The electric vehicle manufacturer shed 72% of its value as it flirted all year with bankruptcy.
Arcimoto anticipated a huge market for its three-wheeled electric motorcycles. They turned out to be a niche product – a niche too small to accommodate all that Arcimoto spent developing its vehicles and the factory it bought to make them.
This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.
-- Mike Rogoway | mrogoway@oregonian.com |
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