Top 20 Best-Performing Stocks: May 2024 - NerdWallet (2024)

We're coming off a stunning year for the stock market, which saw the S&P 500 rise more than 20%. And in the first quarter of 2024, the index surged another 10%. Moreover, some individual stocks in the S&P 500 are continuing their run of triple-digit gains this year. Here's a list of the best stocks in the S&P 500, measured by one-year return, updated weekly.

Best stocks by one-year performance

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Source: Finviz. Data is current as of May 29, 2024, and is intended for informational purposes only.

Are these the best stocks to buy now?

Not necessarily. These are the best stocks in the right now, based on one-year performance. But that doesn't mean that they're the best stocks to invest in. Predicting the future of even the current top-performing stocks is a job even the pros haven’t mastered. And the best stocks for your portfolio aren’t necessarily the best stocks for someone else’s portfolio.

For example, a young person who is looking to aggressively grow their retirement savings (since they have a lot of time to ride out the stock market highs and lows) might gravitate toward growth stocks for their high-risk, high-reward volatility. On the other hand, a retiree who is looking for passive income might prefer predictable dividend stocks like the dividend aristocrats, which are relatively stable and typically increase their dividend payments over time.

7 best stocks to buy now, according to analysts

If you're looking for an expert opinion, here are the seven best stocks in the S&P 500 ranked by analyst consensus recommendation, where a "1" is equivalent to a "strong buy" indicator, and "5" is considered a "strong sell." Remember, though, that even the pros have a hard time picking winning stocks.

Source: Finviz. Data is current as of May. 17, 2024, and is intended for informational purposes only.

How to find the best stocks to buy now

Choosing good stocks for your portfolio can be a time-consuming task, and you need to look beyond performance metrics like the ones on this page. Yes, it's a good sign if a stock is able to outperform during periods of market volatility and the broad market declines like we saw in 2022. But as referenced above, there are a number of other factors to consider.

Beyond your own personal risk tolerance and how long you plan to invest, strategic investors do significant research into a company before buying its stock. They perform fundamental analysis, which involves looking at the company's financial statements and considering how economic factors might influence the stock's future performance.

Many investors also do technical analysis of a stock, which means analyzing historical movements in the stock's price to attempt to predict future movements. If you want to go this route, we have detailed overviews of how to research stocks and how to read stock charts, including key terms to know.

An alternative to chasing the best stocks

If all of the above sounds like a lot of work, it is. The fact that picking stocks is so difficult leads many investors to turn to index funds and exchange-traded funds, which bundle many stocks together.

When you invest in lots of stocks at once through index funds they have a lot of power: The — which includes around 500 of the largest publicly traded companies in the U.S. — has posted an average annual return of nearly 10% since 1928.

An S&P 500 index fund or ETF will aim to mirror the performance of the S&P 500 by investing in the companies that make up that index. Likewise, investors can track the Dow Jones Industrial Average with an index fund tied to that benchmark. If you want to cast a wider net, you could purchase a total stock market fund, which will hold thousands of stocks.

Within index funds, the best stocks balance out the worst ones — and you don’t have to forecast which is which. That’s why many financial advisors think low-cost index funds and exchange-traded funds should form the basis of a long-term portfolio.

Managing expectations

Index funds won’t beat the market. They aren’t supposed to. An index fund’s goal is to match the its index's performance. There are funds that track a particular type of asset, such as AI stock ETFs or tech stock ETFs.

Index funds are inherently diversified, at least among the segment of the market they track. Because of that, all it takes is a few of these funds to build a well-rounded, diversified portfolio. They’re also less risky than attempting to pick a few could-be winners out of a lineup of stocks.

The downside: Some might argue they’re significantly less thrilling than chasing the current best stocks. If you’re seeking that stock-picking rush, you might consider a happy middle ground: Financial advisors often suggest dedicating a small portion of your portfolio to predicting the next big thing, and use index funds for the rest.