In this article, we will take a look at the 10 Best Stocks to Buy to Beat the S&P 500.
According to a FactSet report published on May 1, nearly two-thirds through the earnings season, the S&P 500 has delivered strong results. Both the percentage of companies posting positive earnings surprises and the size of those surprises are running above recent averages. That has pushed first-quarter earnings estimates higher compared to both the end of last week and the end of the quarter itself. The index is also on track for its highest earnings growth rate since Q4 2021.
So far, 63% of S&P 500 companies have reported actual Q1 2026 results. Among them, 84% posted actual EPS above estimates. That is higher than the 5-year average of 78% and the 10-year average of 76%.The report also noted that nine of the eleven sectors are reporting year-over-year earnings growth. Seven of those nine sectors are posting double-digit earnings growth, led by the Communication Services, Information Technology, Consumer Discretionary, and Materials sectors. At the same time, two sectors are showing year-over-year earnings declines: Health Care and Energy.
The S&P 500 fell on Thursday, May 7, after touching a new all-time intraday high. Oil prices recovered from earlier losses as traders continued watching developments between the US and Iran. The broad market index slipped 0.38% to close at 7,337.11. Losses in Amazon, along with semiconductor names such as Broadcom and Micron Technology, weighed on the market. The Nasdaq Composite also edged lower, falling 0.13% to finish at 25,806.20. The tech-heavy index had reached a fresh all-time high earlier in the session.
Given this, we will take a look at some of the best stocks to buy to beat the S&P 500.
Stock market data. Photo by Alesia Kozik on Pexels
Our Methodology:
For this list, we screened for companies that are outperforming the S&P 500 this year so far. From that list, we picked companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. Linde plc (NASDAQ:LIN)
YTD Return as of May 7: 15.65%
On May 5, BMO Capital raised its price recommendation on Linde plc (NASDAQ:LIN) to $560 from $545. It reiterated an Outperform rating after the company posted a Q1 earnings beat. The firm sees Linde as a strong performer, supported by higher near-term pricing, steady demand growth in the US, and improving helium market conditions. According to the analyst, those factors could help the company outperform its 2026 outlook.
On the same day, RBC Capital also lifted its price goal on LIN to $570 from $552 while keeping an Outperform rating on the stock. The firm said Linde delivered a mostly in-line quarter, while its higher FY26 guidance pointed to expectations for low single-digit volume growth and high single-digit EPS growth. The analyst added that foreign exchange tailwinds are expected to ease in the second half of the year. RBC also noted that Linde did not factor helium improvement into its guidance. If helium conditions continue to improve, the company could trend toward the upper end of its FY26 guidance range of $17.60-$17.90.
Linde plc (NASDAQ:LIN) is a UK-based industrial gases and engineering company. Its operations are divided into the Americas, EMEA, APAC, and Engineering segments.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
YTD Return as of May 7: 15.76%
On May 1, Argus raised its price recommendation on QUALCOMM Incorporated (NASDAQ:QCOM) to $220 from $180. It reiterated a Buy rating following the company’s earnings report. The firm said Qualcomm continues to post solid growth outside its handset business. Argus also expects memory availability to gradually improve through 2026 and believes the stock remains attractive at “current depressed levels.”
During the fiscal Q2 2026 earnings call, CEO, President & Director, Cristiano Amon said Qualcomm generated $10.6 billion in revenue and reported non-GAAP earnings per share of $2.65. He noted that EPS reached the upper end of the company’s guidance range. Speaking about the automotive segment, Amon said Qualcomm surpassed $5 billion in annualized revenue for the first time during the quarter. He added that the company expects to exit fiscal 2026 with a revenue run rate above $6 billion.
Discussing the data center business, Amon said the integration of Alphawave had gotten off to a strong start. He also said Qualcomm is entering the custom silicon market and has started production ramp-up with a major hyperscaler. Initial shipments are expected in the December quarter.
QUALCOMM Incorporated (NASDAQ:QCOM) develops and commercializes foundational technologies for the wireless industry, including 3G, 4G, and 5G connectivity, along with high-performance and low-power computing technologies, including on-device artificial intelligence.
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