On December 20, Scott Wren, senior global market strategist at Wells Fargo, appeared on CNBC’s ‘Closing Bell Overtime’ to discuss which sectors are winners and where stocks may be headed going into 2026. Wren stated that the market is currently trading above the midpoint of his firm’s year-end target range. He observed a strong desire for the market to move higher and detailed specific defensive rotations his team made. Specifically, Wells Fargo moved Communication Services from overweight to even weight in August, followed by a similar downgrade for Information Technology four or five weeks ago. While these two sectors still represent nearly 50% of the S&P 500’s market cap, Wren’s team has been trimming those positions to buy into Financials, Utilities, and Industrials, seeking to maintain an AI theme from a different angle.
A day before this, on December 19, Keith Lerner of Truist joined CNBC’s ‘Closing Bell Overtime’ to talk about the day’s market action. Lerner provided a broader perspective on the market cycle and noted that the NASDAQ and S&P 500 have been bobbing within specific ranges. He explained this stagnation as a cooling-off period following one of the largest six-month returns in history, during which the tech sector rose 70% off its lows. He suggested that the market is correcting through both time and price to temper elevated expectations. Looking ahead to next year, Lerner’s base case is a modest economic uptick. He cited historical data showing that in the seven instances since 1950 where a bull market turned three years old, all saw gains the following year. Additionally, he noted that when the Fed cuts rates while the market is near all-time highs, the market has historically been up 12 months later 90% of the time, leading him to conclude the underlying trend still deserves the benefit of the doubt.
That being said, we’re here with a list of the 10 best performing S&P 500 stocks in 2025.
Our Methodology
We sifted through the Finviz stock screener to compile a list of S&P 500 stocks (including spin-offs) that had the highest year-to-date performance. We then narrowed down our selection to 10 stocks with the most hedge fund ownership, as of Q3 2025. The stocks are ranked in ascending order of their year-to-date performance.
Note: All data was sourced on December 22.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Best Performing S&P 500 Stocks in 2025
10. Tapestry Inc. (NYSE:TPR)
Number of Hedge Fund Holders: 60
Year-to-Date Performance as of December 22: 97.41%
Tapestry Inc. (NYSE:TPR) is one of the best performing S&P 500 stocks in 2025. On December 17, Baird analyst Mark Altschwager raised the firm’s price target on Tapestry to $140 from $130 with an Outperform rating on the shares. The firm anticipates a more favorable environment heading into 2026, expecting consumer stimulus to pave the way for robust revenue and earnings growth, particularly once the initial impact of tariffs subsides after the first half of the year.
A day prior to this rating, Wells Fargo analyst Ike Boruchow raised the price target on Tapestry to $135 from $125 with an Overweight rating on the shares. The firm is leaning more bullish on the sector heading into 2026. Despite a bifurcated market, Wells Fargo cited three key tailwinds: resilient early holiday consumer spending, favorable tax policy changes, and the potential for corporate windfalls if tariffs are repealed or refunded.
Additionally, earlier on December 12, Jefferies analyst Ashley Helgans raised the firm’s price target on Tapestry to $142 from $135 and kept a Buy rating on the shares. After adjusting price targets across its fashion coverage, the firm is prioritizing stocks with strong existing momentum over speculative turnaround stories. The firm believes that the market is currently betting on a resilient consumer and a favorable tariff environment in the near term.
Tapestry Inc. (NYSE:TPR) provides accessories and lifestyle brand products in North America, Greater China, rest of Asia, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman.
9. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 61
Year-to-Date Performance as of December 22: 100.86%
KLA Corporation (NASDAQ:KLAC) is one of the best performing S&P 500 stocks in 2025. On December 16, Bank of America raised the firm’s price target on KLA Corporation to $1,450 from $1,400, while maintaining a Buy rating on the shares. BofA is adjusting its price targets across the US semiconductor sector and suggests that 2026 marks the halfway point of a decade-long transition toward upgrading traditional IT infrastructure for AI-driven workloads. Stock volatility may persist as investors scrutinize AI returns and hyperscaler spending, but the firm believes that this pressure will be balanced by the expansion of AI factories and LLM developers.
On the same day, Cantor Fitzgerald upgraded KLA Corporation to Overweight from Neutral with a price target of $1,500, up from $1,350. After beating the S&P 500 by 30 points in 2025, the SOX is expected to remain a market leader through 2026. Cantor Fitzgerald believes that the scale of AI infrastructure spending outweighs any short-term cyclical concerns.
Earlier on December 15, Jefferies upgraded the company to Buy from Hold with a price target of $1,500, up from $1,100. The firm cited KLA Corporation’s dominant position in leading-edge manufacturing as AI scales and believes that the current buildout will catalyze demand for advanced chips, memory, and packaging technologies. With the stock’s valuation recently resetting to more attractive levels, Jefferies sees KLA Corporation as a primary beneficiary of the accelerating investment in AI infrastructure.
KLA Corporation (NASDAQ:KLAC), together with its subsidiaries, designs, manufactures, and markets process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide.
8. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 108
Year-to-Date Performance as of December 22: 101.20%
GE Vernova Inc. (NYSE:GEV) is one of the best performing S&P 500 stocks in 2025. On December 18, Baird raised the firm’s price target on GE Vernova to $816 from $706 and maintained an Outperform rating on the shares. This sentiment was announced as the firm broadly updated its model after the company’s investor update.
Additionally, later on December 22, GE Vernova announced that its Electrification Systems business received a major contract from Adani Energy Solutions Ltd. to provide high-voltage direct current/HVDC technology for the Khavda–South Olpad transmission corridor in India. This project is designed to evacuate renewable power from the Khavda renewable energy zone in Gujarat’s Kutch region to South Olpad, a critical injection point for the national grid.
The project features a 2.5-gigawatt (2,500 MW) capacity, making it the highest-rated voltage-sourced converter/VSC-based HVDC system ever planned in India. GE Vernova will supply a ±500 kV bipolar system consisting of two 1,250 MW links. The scope of work includes the design of the complete system, the supply of major converter station equipment, and the oversight of erection, testing, and commissioning, though it excludes associated civil works.
To ensure stable and efficient grid operations, the system will use the advanced eLumina control platform. The project will be managed primarily by GE Vernova’s India-based teams to use local engineering and manufacturing expertise. Execution is scheduled in phases, with the completion target set for 2030. While the award was announced in late 2025, GE Vernova expects to formally book the order in H1 2026.
GE Vernova Inc. (NYSE:GEV) is an energy company that provides various products and services to generate, transfer, orchestrate, convert, and store electricity in the US, Europe, Asia, the Americas, the Middle East, and Africa. It operates through three segments: Power, Wind, and Electrification.
7. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders: 109
Year-to-Date Performance as of December 22: 113.21%
Carvana Co. (NYSE:CVNA) is one of the best performing S&P 500 stocks in 2025. On December 19, Wedbush analyst Scott Devitt raised the firm’s price target on Carvana to $500 from $400 and kept an Outperform rating on the shares. The firm highlighted that consumer internet stocks outperformed the broader market in 2025, posting an average return of 23% across 24 companies compared to the NASDAQ’s 19%. However, the firm anticipates a more fragmented market in 2026. Performance is expected to vary as investors focus on variables like the impact of AV disruption, AI monetization strategies, the scale of ongoing investment cycles, and the integration of agentic AI.
Earlier on December 15, Argus initiated coverage of the company with a Buy rating and $500 price target.
Additionally, on December 12, Citi raised the firm’s price target on Carvana to $550 from $445 with a Buy rating on the shares. According to the firm’s retail unit sales tracker, Carvana’s growth gained momentum in November, with year-over-year retail sales rising to 37% compared to 32% in October due to rising consumer demand. Citi also increased its EBITDA projections for the company.
Jefferies analyst John Colantuoni also raised the firm’s price target on the company to $550 from $475 with a Buy rating on the shares just a day before. The firm advised investors to remain selective with Internet stocks and cautioned that increased spending on new initiatives may hinder margin growth, while fears regarding AI-driven market disruption could prevent stock valuations from expanding.
Carvana Co. (NYSE:CVNA), together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the US.
6. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 93
Year-to-Date Performance as of December 22: 142.64%
Lam Research Corporation (NASDAQ:LRCX) is one of the best performing S&P 500 stocks in 2025. On December 18, B. Riley raised the firm’s price target on Lam Research to $195 from $180 while maintaining a Buy rating on the shares. The firm identified Lam Research as a high-leverage play on the recovery of memory WFE. The firm argued that the company’s specialized etch leadership makes it the preferred provider for complex memory architectures, allowing the company to capture a disproportionate share of accelerating industry spend.
A day prior to this rating, Mizuho analyst Vijay Rakesh also raised the firm’s price target on Lam Research to $200 from $170 and kept an Outperform rating on the shares. Mizuho expressed optimism regarding 2026 WFE estimates and anticipated potential upside to current projections, and suggested that this WFE outlook serves as a positive catalyst for the company’s growth.
Earlier on December 16, Bank of America analyst Vivek Arya raised the firm’s price target on Lam Research to $195 from $165 while maintaining a Buy rating on the shares. BofA revised its price targets for the US semiconductor stocks and signaled that 2026 marks the halfway point of a decade-long transition toward upgrading traditional IT infrastructure for AI-driven workloads.
Lam Research Corporation (NASDAQ:LRCX) designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits in the US, China, Korea, Taiwan, Japan, Southeast Asia, and Europe.
5. Seagate Technology Holdings (NASDAQ:STX)
Number of Hedge Fund Holders: 72
Year-to-Date Performance as of December 22: 227.71%
Seagate Technology Holdings (NASDAQ:STX) is one of the best performing S&P 500 stocks in 2025. On December 17, Morgan Stanley analyst Erik Woodring raised the firm’s price target on Seagate to $337 from $270 with an Overweight rating on the shares. This decision was made as the firm’s 2026 IT Hardware strategy prioritized ‘cloud capex winners’ and product-cycle leaders, while flagging risks for hardware OEMs. Due to concerns over rising memory costs, the firm suggests being Underweight on memory-heavy names.
Furthermore, on December 2, Citi raised the firm’s price target on Seagate to $320 from $275 with a Buy rating on the shares. The firm made this decision based on a supply-and-demand balance in the memory sector, characterized by restricted production and consistent pricing strength. Citi highlighted that demand visibility now extends through 2027, largely fueled by the growth of unstructured data generated by AI tools.
In Q3 2025, Seagate Technology achieved revenue of $2.63 billion, which represented a 21.3% year-over-year increase and beat analyst estimates by 3%. Non-GAAP EPS reached $2.61, which was 8.8% higher than consensus estimates. Despite the cyclical nature of the semiconductor industry, Seagate’s annualized revenue growth of 18.5% over the last two years indicates a strong demand acceleration relative to its five-year historical trend. Looking ahead to Q4, Seagate projects revenue at a midpoint of $2.7 and an adjusted EPS of ~$2.75, both of which exceeded Wall Street’s forecasts.
Seagate Technology Holdings (NASDAQ:STX) provides data storage technology and infrastructure solutions in Singapore, the US, the Netherlands, and internationally.
4. Robinhood Markets Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders: 77
Year-to-Date Performance as of December 22: 228.42%
Robinhood Markets Inc. (NASDAQ:HOOD) is one of the best performing S&P 500 stocks in 2025. On December 22, Morgan Stanley raised the firm’s price target on Robinhood to $147 from $146 with an Equal Weight rating on the shares. In a sector preview, the firm noted that robust transaction volumes across brokers and exchanges in Q4 2025 have created a likely upside for earnings. Consequently, the firm is raising its Q4 EPS estimates by an average of 5%.
Earlier on December 16, Truist initiated coverage of Robinhood with a Buy rating and $155 price target.
In other news, on the same day, Robinhood unveiled a major expansion of the platform’s AI and prediction market capabilities. Since its launch late last year, prediction markets have become Robinhood’s fastest-growing revenue stream, with over 1 million customers trading 11 billion contracts. To build on this momentum, the company introduced Preset Combos for professional football, allowing users to trade combined outcomes, totals, and spreads.
The day also marked the debut of the next-generation Robinhood Cortex, which is an AI-powered assistant designed for Robinhood Gold subscribers. Reimagined as a central interface for the entire app, Cortex uses real-time market data and professional analyst reports to provide personalized insights and execute trades. Users can now use plain-English commands to buy or sell equities and crypto, conduct research, or adjust account settings. This updated experience is set to roll out in Q1 2026 for Gold members, who pay either $5 monthly or $50 annually.
Robinhood Markets Inc. (NASDAQ:HOOD) operates a financial services platform in the US. Its platform allows users to invest in stocks, ETFs, American depository receipts, options, gold, and cryptocurrencies.
3. Micron Technology Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
Year-to-Date Performance as of December 22: 228.65%
Micron Technology Inc. (NASDAQ:MU) is one of the best performing S&P 500 stocks in 2025. On December 18, Deutsche Bank raised the firm’s price target on Micron to $300 from $280 while keeping a Buy rating on the shares. Following another stunning earnings report and outlook, Deutsche Bank noted that Micron has exceeded even the most ambitious market expectations. The firm highlighted particular strength in pricing and gross margins and asserted that the company’s consistent technical execution and capital discipline are driving a shift within the memory industry.
In its FQ1 2026 earnings report, Micron Technology announced that it achieved total revenue of $13.6 billion, which is a 57% increase year-over-year, driven by an explosion in AI-driven demand. Profits significantly exceeded expectations, with a non-GAAP EPS of $4.78, which was up 58% sequentially. The company’s growth was broad-based across its business units. DRAM revenue reached $10.8 billion (79% of total sales), while NAND revenue hit $2.7 billion.
A major highlight of the report was Micron’s dominance in the HBM market. The company has already finalized price and volume agreements for its entire calendar 2026 HBM supply, including the upcoming HBM4, which is scheduled to ramp with high yields in FQ2 2026. Micron now forecasts that the TAM for HBM will reach $100 billion by 2028. Looking ahead to FQ2, Micron projects a revenue of $18.7 billion and a non-GAAP EPS of $8.42, signaling continued acceleration through the remainder of the fiscal year.
Micron Technology Inc. (NASDAQ:MU) designs, develops, manufactures, and sells memory and storage products in the US, Taiwan, Singapore, Japan, Malaysia, China, India, and internationally.
2. Western Digital Corporation (NASDAQ:WDC)
Number of Hedge Fund Holders: 84
Year-to-Date Performance as of December 22: 292.30%
Western Digital Corporation (NASDAQ:WDC) is one of the best performing S&P 500 stocks in 2025. On December 17, Morgan Stanley raised the firm’s price target on Western Digital to $228 from $188 with an Overweight rating on the shares. The firm advised investors to maintain an Overweight position in IT Hardware companies that benefit from cloud capital expenditures and product cycles. Conversely, the firm remains increasingly cautious on manufacturers with high memory exposure due to the margin pressures associated with rising component costs.
A day before this rating, Cantor Fitzgerald analyst C.J. Muse also raised the firm’s price target on Western Digital to $250 from $200 while keeping an Overweight rating on the shares. After outperforming the S&P 500 by ~30 points in 2025, SOX is expected to continue leading the market higher due to the massive demand for compute, networking, memory, and equipment generated by the early AI era.
While some cyclical factors might cause short-term volatility, the firm believes the combination of a favorable macroeconomic environment and the anticipated exponential surge in AI infrastructure spending justifies a long position in the SOX and an overweight allocation to AI-related stocks heading into 2026.
Western Digital Corporation (NASDAQ:WDC) develops, manufactures, and sells data storage devices and solutions based on hard disk drive/HDD tech in the US, Asia, Europe, the Middle East, and Africa.
1. Sandisk Corporation (NASDAQ:SNDK)
Number of Hedge Fund Holders: 61
Year-to-Date Performance as of December 19: 569.58%
Sandisk Corporation (NASDAQ:SNDK) is one of the best performing S&P 500 stocks in 2025. On December 8, JPMorgan initiated coverage of SanDisk with a Neutral rating and $235 price target. The firm noted that SanDisk is well-positioned to capitalize on the AI-driven enterprise SSD supercycle, benefiting from a low-cost structure through its joint venture with Kioxia. However, JPMorgan cautioned that the company’s current pricing strength is likely a temporary cyclical peak rather than a permanent shift in the industry’s profit margins.
In its FQ1 2026 earnings report, SanDisk Corporation reported a revenue of $2.3 billion, which was a 21% sequential increase and a 23% year-over-year increase. Non-GAAP EPS surged to $1.22, which also exceeded the $0.29 recorded in the previous quarter. This was supported by a non-GAAP gross margin of 29.9%, which grew by 3.5% quarter-over-quarter as the company transitioned to its high-performance BiCS8 technology, which already accounts for 15% of total bits shipped.
Data Center revenue particularly rose 26% sequentially to $269 million, driven by cloud expansion and AI infrastructure needs. The Edge segment, which includes mobile and client storage, also climbed 26% to reach $1.387 billion, while Consumer revenue grew 11% to $652 million. Looking ahead to FQ2 2026, SanDisk projects revenue between $2.55 and $2.65 billion. Management highlighted that visibility into 2026 and 2027 is improving as customers shift toward long-term agreements to ensure supply certainty, particularly for enterprise SSDs like the Stargate portfolio.
Sandisk Corporation (NASDAQ:SNDK) develops, manufactures, and sells data storage devices and solutions using NAND flash technology in the US, Europe, the Middle East, Africa, Asia, and internationally.
While we acknowledge the potential of SNDK to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SNDK and that has 100x upside potential, check out our report about this cheapest AI stock.
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