The S&P 500 (^GSPC) is packed with companies that have built dominant market positions, making it a core index for investors. A select few continue to innovate and expand, setting themselves up for long-term success.
Even in the S&P 500, only a few stocks will consistently outperform, which is why we built StockStory. That said, here are three S&P 500 stocks that could deliver good returns.
Monolithic Power Systems (MPWR)
Market Cap: $65.53 billion
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Why Is MPWR a Top Pick?
- Market share has increased this cycle as its 25.9% annual revenue growth over the last five years was exceptional
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 27.7% annually, topping its revenue gains
- ROIC punches in at 43%, illustrating management’s expertise in identifying profitable investments
At $1,328 per share, Monolithic Power Systems trades at 51.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Axon (AXON)
Market Cap: $40.49 billion
Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
Why Are We Bullish on AXON?
- ARR trends over the past two years show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Operating margin improvement of 10.1 percentage points over the last five years demonstrates its ability to scale efficiently
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 26.6% annually
Axon is trading at $501 per share, or 59.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Diamondback Energy (FANG)
Market Cap: $57.58 billion
Sporting one of Wall Street's most memorable ticker symbols, Diamondback Energy (NASDAQ: FANG) drills for and produces oil and natural gas from underground rock formations in the Permian Basin of West Texas and New Mexico.
Why Will FANG Outperform?
- Market share has increased this cycle as its 42.8% annual revenue growth over the last ten years was exceptional
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 80.2%
- Strong free cash flow margin of 37.1% enables it to reinvest or return capital consistently
Diamondback Energy’s stock price of $206.72 implies a valuation ratio of 10.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
