In this article, we will take a look at the 5 Best Stocks to Buy to Beat the S&P 500. For deeper discussion and analysis, read 10 Best Stocks to Buy to Beat the S&P 500.
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5. Alphabet Inc. (NASDAQ:GOOG)
YTD Return as of May 7: 24.2%
On May 7, Mizuho raised its price recommendation on Alphabet Inc. (NASDAQ:GOOG) to $460 from $420 and maintained an Outperform rating on the shares. The firm said Wall Street estimates still significantly understate Google Cloud’s revenue and operating income potential over the next two years.
During the Q1 2026 earnings call, Sundar Pichai, CEO of Alphabet Inc., said the quarter reflected strong AI-driven momentum across the company’s businesses. He noted that Alphabet’s investments in AI and its full-stack strategy continued to support performance across the portfolio. Pichai also said AI remained a major driver of Search growth, with both search usage and query volumes reaching record highs during the quarter.
Discussing cloud performance, Pichai said growing demand for the company’s AI products and infrastructure helped accelerate Google Cloud growth. Cloud revenue increased 63% and surpassed $20 billion for the first time. He also noted that the company’s backlog nearly doubled from the prior quarter to more than $460 billion.
Pichai highlighted continued expansion across products and models, saying total paid subscriptions reached 350 million. He added that Alphabet’s first-party models were processing more than 16 billion tokens per minute through direct API usage by customers, up from 10 billion in the previous quarter.
Alphabet Inc. (NASDAQ:GOOG) is a holding company with segments that include Google Services, Google Cloud, and Other Bets. Google Services includes products and platforms such as Search, YouTube, Android, Chrome, Google Maps, Google Play, devices, and advertising services.
4. Archer-Daniels-Midland Company (NYSE:ADM)
YTD Return as of May 7: 31.9%
On May 7, Morgan Stanley raised its price recommendation on Archer-Daniels-Midland Company (NYSE:ADM) to $58 from $54. It reiterated an Underweight rating on the shares. The firm said ADM delivered “solid results,” but its cautious stance remains tied to a preference for the company-specific opportunity at Bunge (BG). The analyst also pointed to risks at ADM that could limit upside to earnings growth.
During the Q1 2026 earnings call, Juan Luciano, Chairman, CEO, and President of ADM, said the company reported adjusted earnings per share of $0.71 and total segment operating profit of $764 million for the quarter. He added that trailing four-quarter adjusted return on invested capital was 6.4%, while cash flow from operations before working capital changes reached $442 million.
Luciano said market conditions improved for ADM’s biofuels-related businesses during the quarter. According to him, the crushing and ethanol segments benefited from a stronger commodity and margin environment. He also noted that soybean crush and ethanol margins improved significantly as markets anticipated the finalization of renewable volume obligations for 2026 and 2027. Luciano announced that ADM had raised its earnings outlook for 2026. The company increased its full-year adjusted EPS guidance range to $4.15-$4.70 from the previous range of $3.60-$4.25.
Archer-Daniels-Midland Company (NYSE:ADM) is a global agricultural supply chain manager and processor. The company provides food security services and operates in both human and animal nutrition markets.
3. Baker Hughes Company (NASDAQ:BKR)
YTD Return as of May 7: 35.11%
On May 4, BofA raised its price recommendation on Baker Hughes Company (NASDAQ:BKR) to $80 from $69. It reiterated a Buy rating on the shares. The firm said Baker Hughes’ “unique position at the intersection of energy/industrial markets continues to drive differentiated financial performance.” The analyst also raised 2026 and 2027 EBITDA estimates by 2% each, citing stronger results from the IET segment and a better outlook for non-Middle East OFSE operations following the war in Iran.
During the Q1 2026 earnings call, Lorenzo Simonelli, Chairman, President, and CEO of Baker Hughes, discussed several portfolio actions taken by the company. He said Baker Hughes announced the divestiture of Waygate Technologies. Along with the sale of PSI to Crane and the joint venture with Cactus, the company expects these transactions to generate about $3 billion in gross proceeds during 2026.
Simonelli also pointed to strong demand trends within the Industrial & Energy Technology segment. He said bookings reached a record $4.9 billion during the quarter, while the IET business delivered a book-to-bill ratio of 1.5x. He added that remaining performance obligations climbed to a record $33.1 billion. According to Simonelli, the company is becoming more confident that its Horizon 2 IET order target will exceed $40 billion.
Baker Hughes Company (NASDAQ:BKR) is an energy technology company that provides solutions to energy and industrial customers around the world. Its operations are divided into the Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments.
2. Microchip Technology Incorporated (NASDAQ:MCHP)
YTD Return as of May 7: 53.77%
On May 7, Reuters reported that Microchip Technology Incorporated (NASDAQ:MCHP) forecast first-quarter revenue above Wall Street estimates, driven by strong demand for its chips used in industrial and automotive markets. Shares of MU company rose more than 2% in extended trading following the announcement. The company has benefited from a cyclical recovery in key end markets, including industrial and automotive. Demand tied to artificial intelligence data centers has also continued to support growth.
At the same time, spending in aerospace and defense markets has remained strong, helped by geopolitical tensions and higher government budgets. That has provided another steady source of revenue growth for the company. Microchip expects first-quarter revenue to range between $1.44 billion and $1.47 billion. That came in above analysts’ average estimate of $1.34 billion, according to data compiled by LSEG. The company also forecast adjusted earnings of 67 cents to 71 cents per share, ahead of estimates of 59 cents per share.
For the fourth quarter, Microchip reported revenue of $1.31 billion, topping estimates of $1.26 billion. Adjusted earnings came in at 57 cents per share, compared with expectations of 51 cents per share.
Microchip Technology Incorporated (NASDAQ:MCHP) provides smart, connected, and secure embedded control solutions. Its semiconductor products business designs, develops, manufactures, and markets mixed-signal microcontrollers, development tools, analog and interface products, timing and connectivity devices, and memory products.
1. Advanced Micro Devices, Inc. (NASDAQ:AMD)
YTD Return as of May 7: 81.29%
On May 7, TD Cowen raised its price recommendation on Advanced Micro Devices, Inc. (NASDAQ:AMD) to $500 from $290. It reiterated a Buy rating on the shares. The firm said earlier concerns around elevated expectations were outweighed by AMD’s decision to double its server CPU total addressable market forecast that was issued just six months ago. TD Cowen also pointed to growing confidence in the company’s data center GPU engagements.
On the same day, Cantor Fitzgerald raised its price goal on AMD to $500 from $450. It maintained an Overweight rating on the stock. The firm said AMD delivered strong quarterly results, driven by accelerating growth in server CPUs and AI GPUs. Revenue and earnings per share both came in ahead of expectations, while tight industry supply conditions also supported performance. According to the analyst, AMD remains positioned for continued momentum as AI-related demand grows, new products ramp up, and data center opportunities expand. The firm added that some margin pressure, operating expense growth, and supply constraints still remain.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company focused on high-performance computing and artificial intelligence. Its business segments include Data Center, Client and Gaming, and Embedded.
While we acknowledge the potential of AMD 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 AMD and that has 100x upside potential, check out our report about the cheapest AI stock.
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