Nvidia (NVDA -2.09%) is about to do it again. The chipmaker is only a few weeks away from delivering its fourth gain of over 100% in the last five years.
In 2023, Nvidia reigned as the best-performing stock in the S&P 500 Index. Is a repeat performance coming? Probably not. Meet the only three S&P 500 stocks that are beating Nvidia this year.
1. Palantir Technologies
Artificial intelligence (AI) and data analytics software company Palantir Technologies (PLTR -3.72%) is one of the newest members of the S&P 500, joining the prestigious index in September 2024. This newbie is now the best-performing stock in the S&P with a year-to-date gain of over 300%. That's well above Nvidia's gain of around 180%.
Sure, Palantir's inclusion in the S&P 500 boosted its share price. However, the stock was already a huge winner thanks largely to its impressive growth. This momentum continued in the third quarter of 2024, with Palantir reporting its revenue jumped 30% year over year. CEO Alexander Karp said the strong performance was "driven by unrelenting AI demand that won't slow down."
Palantir stock has especially taken off after the U.S. presidential election in November. The company is widely viewed as a likely winner in President-elect Trump's next administration.
2. Vistra
Vistra (VST -3.07%) provides electricity in 20 states. Some investors might view utility stocks as boring. However, Vistra has been downright exciting in 2024 with its share price quadrupling year to date, lagging only slightly behind Palantir.
One key secret to Vistra's recent success is the resurgence of the nuclear power industry. In 2023, roughly 7% of the company's power generation capacity came from nuclear power plants. Earlier this year, though, Vistra completed its acquisition of Energy Harbor, adding around 4,000 megawatts of nuclear generation capacity.
Vistra has at least one thing in common with Nvidia: Both companies benefit from the soaring demand for AI. The data centers that run AI applications require tremendous amounts of electricity. Vistra finalized agreements in the third quarter of 2024 to provide power to Amazon in Texas and Microsoft in Illinois -- a sign of how important data centers have become to the company's business.
3. Texas Pacific Land Corp.
Texas Pacific Land Corp. (TPL -1.88%) owns around 873,000 acres in Texas. Most of this land is in the Permian Basin, the highest-producing oil region in the U.S. TPL is enjoying a banner year in 2024, with its share price up over 190%.
The company conducted a three-for-one stock split on March 18, 2024. However, this stock split wasn't a major factor in TPL's outstanding gains this year. The stock received an even bigger boost after the announcement that it would replace Integra Lifesciences Holdings in the S&P MidCap 400 in June. Only a few days ago, TPL was added to the S&P 500.
Texas Pacific Land isn't an oil and gas producer, but the company makes money from royalties it receives from oil and gas producers. The "drill, baby, drill" approach of the incoming Trump administration could be positive for TPL.
Most likely to beat Nvidia again in 2025?
Which of these three stocks is most likely to beat Nvidia again in 2025? My pick is Vistra.
I like Palantir's business prospects. However, like some Wall Street analysts, I'm concerned about its sky-high valuation. I also think Texas Pacific Land has solid prospects, but I don't have a warm-and-fuzzy feeling that the landowner will be able to outperform Nvidia next year.
Vistra, on the other hand, could continue to benefit from AI data center growth and increasing interest in nuclear power. The stock's price-to-earnings-to-growth (PEG) ratio is a low 0.89, according to LSEG. I wouldn't bet the farm that Vistra will deliver a bigger gain than Nvidia will in 2025, but I suspect it's in the strongest position to do so among these three stocks.
