The stock market reached new heights in 2024, continuing its positive trend from the past two years. The S&P 500 (SPX), a key index representing the top 500 companies, has gained 28% year-to-date, driven by strong earnings and optimism around lower interest rates. Looking ahead to 2025, investor sentiment remains strong, bolstered by hopes for favorable policies, including lower taxes and reduced regulations under the Trump administration.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Amid this backdrop, some stocks have significantly outpaced the S&P 500. Using TipRanks’ screener, we’ve identified three “Strong Buy” stocks that have performed better than the index this year. Also, all of these three stocks have a Smart Score of “Perfect 10,” indicating that these stocks may continue to outperform the market.
Alphabet’s Growth in AI and Cloud Drives Outperformance
First up is a tech giant, Alphabet Inc. (GOOGL). Headquartered in Mountain View, California, this company has outperformed the S&P 500 in 2024, supported by steady growth in its core advertising business and expansion in cloud computing. Its focus on integrating artificial intelligence into services like Google Search and Workspace, along with disciplined cost management, has driven investor confidence and boosted its stock performance.
GOOGL is up 23.6% in the past 3 months, 11% in the past 6 months, and 41.0% year to date. Following these impressive gains, Goldman Sachs, recently, maintained its Buy rating and $210 price target on Alphabet after the company introduced its latest AI model, Gemini 2.0. The firm expressed growing confidence in Alphabet’s ability to remain a leader in AI, positioning itself strongly for long-term opportunities in enterprise and consumer computing.
Overall, Alphabet has a Strong Buy consensus rating based on 27 Buys and six Sells assigned in the last three months. The shares are currently priced at $196.66, and their $209.21 average price target suggests a modest one-year increase of about 7%.
See more GOOGL analyst ratings
Vistra Corp.: Clean Energy Drives Outperformance
Next is Vistra Corp. (VST), a Texas-based energy company that has outperformed the S&P 500 this year. The company’s growth comes from its focus on clean energy, including battery storage and renewable projects. Strong cash flow and efforts to reward shareholders through dividends and stock buybacks have helped lift its stock performance.
With a dividend yield of 0.7%, VST is up 59.8% in the past 3 months, 73.8% in the past 6 months, and 280.5% year to date. Building on this momentum, all 10 analysts tracking the stock are optimistic about its future. In a recent note, Julien Dumoulin Smith from Jefferies believes the company’s value could increase due to potential data center deals in the PJM (Pennsylvania-New Jersey-Maryland) and ERCOT (Electric Reliability Council of Texas) regions, as both of these areas are critical for energy supply and data center demand.
Overall, VST has a Strong Buy consensus rating based on 10 unanimous Buys. The shares are currently priced at $145.33, and their $156 average price target suggests a modest one-year increase of 7.34%.
TSMC’s Strong Chip Demand Fuels 2024 Outperformance
The third company on the list is Taiwan Semiconductor Manufacturing Company, or TSMC (TSM). Based in Hsinchu, Taiwan, TSM has outperformed the S&P 500 in 2024, driven by strong demand for its advanced chips, especially in sectors like AI, automotive, and consumer electronics. Though the company has faced challenges due to geopolitical tensions, particularly between the U.S. and China, its partnerships with major tech companies have supported its growth and positive market performance.
TSM is up 20.8% in the past 3 months, 14.4% in the past 6 months, and 96% year to date. All five analysts tracking the stock are optimistic about its future. In a note dated December 10, Bernstein SocGen Group analyst Mark Li reiterated an Outperform rating and $258.00 price target on TSMC. The firm believes that TSM is planning a more aggressive CoWoS (Chip-on-Wafer-on-Substrate) capacity expansion in 2025 to meet strong AI demand. Besides for AI, the analyst believes that the demand for its N3 and N5 chips is expected to grow through its partnerships with AMD, Intel, and Arm-based CPU vendors.
Overall, TSM has a Strong Buy consensus rating based on five unanimous Buys. The shares are currently priced at $202.22, and their $232.50 average price target suggests a one-year increase of about 15%.
Conclusion
Alphabet, Vistra, and Taiwan Semiconductor have outperformed the S&P 500 in 2024, driven by strong growth in AI, clean energy, and advanced chip demand. With positive analyst ratings and Smart Scores of “Perfect 10,” these “Strong Buy” stocks are well-positioned for continued success.