The S&P 500 is again one of the top-performing global indices since the start of the year, up 28.5% as at Dec 13. Here the top-performing constituents of the S&P 500, the reasons behind their outperformance and whether investors should still consider investing in them by looking at the individual company’s financial health, relative valuation and sentiment.
1. Palantir Technologies
Palantir Technologies, led by CEO Alex Karp, develops software platforms that mine data and is one of the best-performing US stocks this year
Palantir Technologies is the top-performing stock of the S&P 500, up 343% yearto-date (ytd). Palantir provides software solutions and offers platforms for integrating, managing and securing data that helps in interactive human-driven, machine-assisted analysis for companies worldwide. The company’s substantial share price gain was primarily due to its inclusion into the S&P 500 index in September. Improving financials, results outperforming expectations and higher forecast spending on artificial intelligence (AI) are other key reasons behind the company’s share price rally. Palantir’s latest 3Q2024 results indicated a 30%, 39% and 43% y-o-y growth in revenue, customer count and adjusted EPS, respectively. The company’s margins are excellent, with 58% and 60% operating cash flow margin and free cash flow margin, respectively. Palantir’s financial health is excellent, with strong liquidity and a net cash position. However, compared to global peers, the company is very expensive, as it trades at more than four times its forward P/E, forward P/B and forward EV/Ebitda ratios. Sentiment-wise, analysts are more negative on the stock with three “buy” calls, 11 “hold” calls and seven “sell” calls and an average target price of over 40% below its current trading price of US$76.07 ($104.53).
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2. Vistra Corp
Vistra Corp runs the world’s largest battery energy storage facility here at Moss Landing, California
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Vistra Corp is the second best-performing stock of the S&P 500, up 279% ytd. Vistra operates an integrated retail and electric power generation business primarily in markets throughout the US. One of the major reasons for the company’s share price gain this year was its inclusion into the S&P 500 in May. Other key factors behind Vistra’s rally include better financials, strong results and the expected increase use of nuclear energy to power AI and data-centre-related processes. For Vistra’s latest 3Q2024 results, the company reported a 54%, 210% and 320% y-o-y increase in revenue, operating income and diluted EPS, respectively. The company’s margins are good, with 25% and 12% operating cash flow margin and free cash flow margin, respectively. Vistra’s financial health is questionable; although it appears to have good short-term liquidity, its net debt-to-equity ratio is over 200%. However, given the company’s interest coverage ratio of 3.4 times, its overall financial health is adequate. Relative to local peers, the company trades at a 1% premium for its forward PE, an 8% discount for its forward EV/Ebitda and a premium of over five times for its forward P/B. Sentiment-wise, analysts are very positive on the stock, with 14 “buy” calls, no “hold” calls and just one “sell” call with an average target price of over 10% above its current trading price of US$144.89 ($197.44).
3. Nvidia Corp
Jensen Huang, CEO of Nvidia Corp, teasing his former investor Masayoshi Son of SoftBank Group for selling too early
Nvidia Corp is the third-best performing stock of the S&P 500, up 171% ytd. Nvidia is a tech company that develops platforms for scientific computing, artificial intelligence (AI), data science, autonomous vehicles, robotics, metaverse, 3D internet applications and PC graphics. Nvidia is the second-largest company in the world, with a whopping market capitalisation of US$3.29 trillion and continues to rise due to the prevalence and widespread usage of AI. Results that beat expectations, generative AI developments and increasing demand for graphics processing units (GPUs) are key factors that boosted the company’s share price. Nvidia reported a tremendous set of results for its latest 3Q2025, with y-o-y revenue and diluted EPS increasing 94% and 111%, respectively. The company’s financial health is excellent, with a cash ratio of 2.4 times, a net cash position and an interest coverage ratio of over 100 times. The company, however, is expensive relative to global peers, trading at a 16% and 66% premium for its forward P/E and forward EV/Ebitda, respectively, and over 15 times for forward P/B. Sentiment-wise, analysts are optimistic about the stock, with 69 “buy” calls, seven “hold” calls and zero “sell” calls and an average target price of over 25% above its current trading price of US$134.25 ($183).
4. Axon Enterprise
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A body camera from Axon Enterprise as seen with a Los Angeles Police Department (LAPD) officer
Axon Enterprise is the fourth best-performing stock of the S&P 500, up 150% ytd. Axon is a public safety technology company that offers solutions for law enforcement, military and self-defence worldwide. The company’s significant share price gain was mainly due to its exceptional results for the most recent 3Q2024. The integration of AI into its products, revenue and earnings beat, along with a raised guidance, were some of the highlights for the period. Quarterly revenue grew 32% y-o-y, while adjusted ebitda and operating cash flow increased 54% and 45% y-o-y, respectively. Business metric-wise, annual recurring revenue grew 36%. Axon’s balance sheet and financials are very healthy, with a current ratio of three times, a net cash position and an interest coverage ratio of over 20 times. However, compared to local peers, the company is expensive, as it trades at more than four times premium for its forward P/E and forward EV/Ebitda ratios and almost six times premium for its forward P/B ratio. Sentiment-wise, analysts are positive on the stock with 15 “buy” calls and no “hold” and “sell” calls, with an average target price of around 4% below its current trading price of US$644.91 ($878.74).
5. Texas Pacific Land Corp
Texas Pacific Land owns more than 880,000 acres of land in 20 West Texas counties, making it among the largest private land owners in the huge US state
Texas Pacific Land Corp (TPLC) is the fifth best-performing stock of the S&P 500, up 133% ytd. TPLC is one of the largest landowners in Texas and derives revenue from oil and gas royalties, water sales, produced water royalties, easements, land sales and other related income. One of the key reasons for the company’s share price gain this year was its inclusion into the S&P 500 in November. The other driving factor behind TPLC’s share price gain is that the company expects data centres to be built on its land. In 3Q2024, the company reported a 9.9%, 0.3% and 1.1% y-o-y increase in revenue, operating income and diluted EPS, respectively. Other company highlights include a three-for-one stock split in March and a special dividend of US$10 per share in July. TPLC, however, is expensive compared to domestic peers, as it trades at a 211% and 311% premium for its forward P/E and forward EV/ Ebitda and over 13 times premium for its forward P/B ratio. Sentiment-wise, although there is minimal coverage from analysts, the sentiment is positive, with two “buy” calls and no “hold” or “sell” calls. TPLC currently trades at US$1,198.97 ($1,633.62).
6. United Airlines
A Boeing 777-200 operated by United Airlines having maintenance work done
United Airlines is the sixth best-performing stock of the S&P 500, up 131% ytd. United Airlines owns and manages airlines that transport people and cargo worldwide. Some of the reasons why the company’s share price has performed well this year are a good set of results in its most recent financial report, analyst upgrades and a substantial share repurchase programme worth US$1.5 billion. In the most recent 3Q2024, operating revenue was up 2.5% y-o-y. Year to date, United Airlines’ operating income and diluted EPS were up 10.6% and 6.7% y-o-y, respectively. Business-wise, capacity and traffic were up 4.1% and 2.7%, respectively, over the same period. The company’s financial health could be better, with below-average liquidity and satisfactory solvency. United Airlines’ current ratio is 0.83 times, has a net debt-to-equity ratio of 215% and an interest coverage ratio of 2.2 times. Compared to regional peers, the company trades at a 5% and 1% discount for its forward P/E and forward EV/Ebitda but a 22% premium for its forward P/B ratio. Sentiment-wise, analysts are mostly positive on the stock, with 22 “buy” calls, one “hold” call and one “sell” call, with an average target price of over 10% above its current trading price of US$95.11 ($129.60).
7. Targa Resources Corp
Targa Resources Corp is one of the natural gas players in the US
Targa Resources Corp is the seventh best-performing stock of the S&P 500, up 117% ytd. Targa is one of North America’s largest independent midstream infrastructure companies that gathers, processes, transports, stores, and sells natural gas and natural gas liquids and logistics services to refiners, petrochemical companies and exporters. The company’s sizeable share price gain this year could be attributed to its strong profitability and set of results, which entailed plans to construct more gas processing plants that would provide visibility for better free cash flow, along with the announced 33% y-o-y increase for its 2025 common dividends. In its most recent 3Q2024, Targa’s operating income, adjusted ebitda and adjusted operating cash flow were up 44%, 27% and 33% y-o-y, respectively. The company’s financial health is worrying, as its current ratio of 0.79 times and net debt-to-equity ratio of 280% indicate suboptimal liquidity and solvency. However, Targa’s interest coverage ratio of 3.8 is adequate. Relative to regional peers, the company trades at a 22% and 9% premium for its forward P/E and forward EV/ Ebitda, and a premium of almost five times for its forward P/B ratio. Sentiment-wise, analysts are mostly optimistic about the stock, with 19 “buy” calls, two “hold” calls and one “sell” call and an average target price of around 10% above its current trading price of US$184.62 ($251.55).
8. Howmet Aerospace
Howmet Aerospace is known as a key supplier of critical parts and components for aircraft engines and gas turbines
Howmet Aerospace is the eighth best-performing stock of the S&P 500, up 110% ytd. Howmet provides engineered metal products such as engines, fasteners, structures and forged wheels, and serves the aerospace and commercial transportation industries. The reasons for the company’s continued share price rise through the year include results exceeding expectations and better management guidance. Howmet’s latest 3QFY2024 results indicated an 11%, 27% and 54% y-o-y increase in revenue, adjusted ebitda and adjusted EPS. Despite industry challenges, the company also raised its FY2024 guidance for adjusted ebitda and adjusted EPS above the 3Q2024 outperformance. Howment’s overall financial health is decent, with strong liquidity represented by a current ratio of 1.9 times and sufficient solvency represented by a net debt-to-equity ratio of 80% and an interest coverage ratio of 5.3 times. However, the company is expensive and trades at a 29%, 41% and 91% premium for its forward P/E, forward EV/Ebitda and forward P/B, respectively, compared to local peers. Sentiment-wise, analysts are positive on the stock, with 21 “buy” calls, three “hold” calls and one “sell” call and an average target price of over 10% above its current trading price of US$113.43 ($154.57).
9. Constellation Energy
Constellation Energy plans to revive the Three Mile Island nuclear plant for US$1.6 billion and sell the output to Microsoft Corp
Constellation Energy is the ninth best-performing stock of the S&P 500, up 106% ytd. Constellation Energy produces carbon-free energy and sustainable solutions by generating and distributing nuclear, hydro, wind and solar energy solutions in the US. The rising demand for electricity to power data centres, such as when signing a nuclear power deal with Microsoft in September, is the key reason behind the company’s share price outperformance. In the most recent 3Q2024, Constellation Energy reported revenue, operating income and diluted EPS were up 7.2%, 50.2% and 69.0%, respectively. The company’s balance sheet is sufficiently healthy with a current ratio of 1.7 times, net debt-to-equity ratio of 78% and interest coverage ratio of 3.7 times. Relative to regional peers, Constellation Energy trades at a 33% and 38% premium for its forward P/E and forward EV/Ebitda but at a 27% discount for its forward P/B ratio. Sentiment-wise, analysts are mostly optimistic about the stock, with 14 “buy” calls, six “hold” calls and no “sell” calls. It has an average target price of almost 20% above its current trading price of US$239.07 ($326.60).
10. Broadcom Inc
Broadcom CEO Hock Tan has built up the tech giant via a series of bold acquisitions
Broadcom completes the top 10 best-performing stocks of the S&P 500, up 104% ytd. Broadcom designs, develops and supplies semiconductor and infrastructure software solutions by offering storage adapters, controllers, networking processors, motion control encoders, optical sensors, and infrastructure and security software worldwide. Better-than-expected earnings and analyst upgrades after its results on Dec 12 significantly contributed to the company’s share price gain for the year. In its most recent 4Q2024, revenue was up 51% y-o-y, while adjusted Ebitda and operating cash flow were up 50% and 16% y-o-y, respectively. The company’s financial health is adequate, as shown by its current ratio of 1.2 times, which implies good liquidity, and its net debt-to-equity ratio of 86%, with an interest coverage ratio of 3.4 times, denoting sufficient solvency. Broadcom is expensive compared to global peers, as it trades at a 69% and 91% premium for its forward P/E and forward EV/Ebitda and over four times premium for its forward P/B ratio. Sentiment-wise, analysts are positive on the stock, with 43 “buy” calls, four “hold” calls and one “sell” call and an average target price of more than 5% above its current trading price of US$224.80 ($306.31).
