VOO and SPY ETFs: Top stocks driving the S&P 500 Index in 2025

The S&P 500 Index has surged to a record high of $6,692, up nearly 40% from its low, largely propelled by artificial intelligence tailwinds. This rally is notably led by a diverse group of companies, including 'old-school' hardware manufacturers like Seagate (+152%) and Western Digital (+137%) benefiting from AI infrastructure demand, alongside high-growth software firm Palantir (+135%) following strong results. Additionally, Newmont (+120%) has gained from record gold prices, and media giants Warner Bros (+85%) and Paramount Skydance (+80%) have surged amidst M&A speculation and activity.

Analysis

The S&P 500 Index has reached a record level of 6,692, marking a nearly 40% increase from its year-to-date low, with artificial intelligence serving as the primary catalyst. While mega-cap technology firms are fueling AI-related capital expenditures, the index's top individual performers are surprisingly 'old-school' hardware manufacturers. Seagate Technology and Western Digital have delivered standout returns of 152% and 137% respectively, benefiting directly from heightened demand for hard disks in AI data centers. Similarly, memory-chip maker Micron has seen its stock soar by 84% following strong financial results. In the software space, Palantir Technologies has surged 135%, driven by quarterly revenues surpassing the $1 billion mark and a strategic inflection point where its commercial business is poised to overtake its government segment; however, its valuation, with a market capitalization exceeding $430 billion on less than $5 billion in annual revenue, is noted as a point of investor scrutiny. Beyond technology, the rally is supported by diverse themes: Newmont Corporation has gained 120% as gold prices climbed to nearly $3,800, while media stocks like Warner Bros. (+85%) and Paramount Skydance (+80%) have risen on M&A activity and speculation. This market demonstrates significant performance dispersion, as major laggards including The Trade Desk and Lululemon have declined by over 40%, underscoring that the gains are not uniform across the index.

Key Decisions for Investors

• Investors should consider expanding their AI exposure beyond semiconductor giants to second-derivative beneficiaries like data storage hardware firms Seagate and Western Digital, which are showing direct top-line benefits from data center build-outs.
• While Palantir's operational growth is compelling, its elevated valuation warrants caution, and it may be prudent to monitor for sustained profitability and commercial segment growth to justify its market capitalization.
• The significant stock appreciation in Warner Bros. and Paramount highlights opportunities in event-driven strategies, suggesting investors monitor sectors undergoing consolidation, such as media, for potential M&A-related alpha.
• Given the stark divergence between the index's leaders and laggards, a broad passive investment may mask underlying weakness, indicating that active stock selection or thematic portfolio tilts toward AI infrastructure, commodities, and M&A targets could yield superior returns.