ETFs
5 Best Performing Stocks in ETFs
The S&P 500 Index has had an incredible rally this year, hitting new milestones and gaining 13.6% so far. The index has now crossed the 5,400 level for the first time after hitting the 5,300 threshold last month, underscoring strong sentiment. The final leg of the rally came on colder-than-expected inflation data despite hawkish comments from the Fed (read: ETFs Focus on Upcoming S&P 500 Shuffle).
SPDR S&P 500 ETF Trust SPY, the proxy version of the S&P 500 index, has gained 13.3% year to date. While many stocks have fueled the ETF, we’ve highlighted five that have led the way higher. These are Super Micro Computer Inc. SMCI, NVIDIA Company NVDA, Vistra Energy Corp. VST, Constellation Energy Company CEG and First Solar Inc. FSLR.
Inflation in the United States slowed in May for the second consecutive month. The consumer price index rose 3.3% year-on-year in May, down from 3.4% annual growth in April. On a monthly basis, prices remained stable for the first time since July 2022. Declining inflation indicates that the economy is stabilizing and interest rates may fall.
At the latest FOMC meeting that ended yesterday, U.S. policymakers scheduled just one rate cut this year and forecast four cuts in 2025. The Fed changed the wording of its statement, noting that there was “further modest progress toward the committee’s 2 percent inflation target.” Previously, the statement highlighted a “lack” of further progress. The Fed meeting signals a period of higher interest rates for some time to come, which will continue to act as a positive push for the S&P 500 due to its less volatile nature (read: 5 large-cap ETFs to the vanguard of this year’s market rally).
Additionally, strong earnings growth and enthusiasm for artificial intelligence (AI) have driven stocks higher. In particular, the Magnificent Seven are the biggest growth engine for the technology sector and the S&P 500 as a whole. It now represents 31% of the weight of the S&P 500.
Let’s take a closer look at the fundamentals of SPY.
Espionage in brief
SPDR S&P 500 ETF Trust holds 503 stocks in its basket, each representing no more than 7.1% of assets. This suggests a good balance between each security and avoids high concentration. The fund is broadly distributed across the information technology, financials, healthcare and consumer discretionary sectors, each with a double-digit allocation.
SPDR S&P 500 ETF Trust has $541 billion in assets under management and charges 9 basis points in fees per year. It trades with an average daily volume of 51 million shares and has a Zacks ETF Rank #2 (Buy) with a Medium Risk Outlook (see: all Large Cap Blend ETFs here).
Below, we’ve highlighted the five best-performing stocks in the ETF mentioned above.
The story continues
SPY Best Performing Stocks
Super Micro designs, develops, manufactures and sells energy-efficient and application-optimized server solutions based on x86 architecture. The stock has soared 172.5% this year and represents 0.08% of the SPY portfolio.
Super Micro has an estimated earnings growth rate of 44.6% for the fiscal year (ending June 2025) and a Zacks Rank #3 (Hold).
Nvidia is the world leader in visual computing technologies and the inventor of the graphics processing unit or GPU. The stock has surged 152.8% this year. Its growth is estimated at 106.1% for the financial year (ending January 2025).
Nvidia represents 6.6% of SPY’s assets and currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vistra Energy is an energy company that provides power and electricity generation, distribution and transmission solutions. The stock has surged 135.1% so far this year. It represents 0.07% of SPY portfolio assets.
Vistra Energy has an expected earnings growth rate of 5.8% for this year and a Zacks Rank #1.
Constellation Energy produces and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock has surged 86.6% so far this year. It represents 0.15% of the SPY portfolio assets.
Constellation Energy has an expected earnings growth rate of 52.1% for this year and a Zacks Rank #2 (Buy) (read: ETFs to make the most of the AI-powered utilities sector).
First solar is the world’s largest manufacturer of thin-film solar photovoltaic modules and the largest manufacturer of solar photovoltaic modules in the Western Hemisphere. The stock is up 74.5% so far this year and represents a 0.07% share in the SPY portfolio.
First Solar’s earnings are expected to grow a substantial 75.1% this year. The stock carries a Zacks Rank #3.
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Constellation Energy Corporation (CEG): Free Stock Analysis Report
First Solar, Inc. (FSLR): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report
Vistra Corp. (VST): Free Stock Analysis Report