A dozen S&P 500 names have been the breakout stars of the year, up an average of 145 percent and trading at about 43 times expected earnings. Their earnings outlook explains why. Analysts expect roughly 80 percent profit growth in 2025 and another 40 percent in 2026, which keeps their PEG ratio near 1 instead of bubble territory.
While the S&P 500 is up about 16 percent on the year, these stocks have blown past the rest of the market. The list includes Western Digital $WDC ( ▲ 4.9% ) , Robinhood $HOOD ( ▼ 3.74% ) , Seagate Technology $STX ( ▲ 4.95% ) , Micron Technology $MU ( ▲ 4.66% ) , Newmont $NEM ( ▼ 1.06% ) , Palantir $PLTR ( ▲ 2.16% ) , Lam Research $LRCX ( ▲ 1.03% ) , Amphenol $APH ( ▼ 0.07% ) , Intel $INTC ( ▲ 2.25% ) , AppLovin $APP ( ▲ 1.19% ) , KLA $KLAC ( ▲ 0.53% ) , and NRG Energy $NRG ( ▼ 3.76% ) . Most of them are tied directly to the AI trade or the hardware needed to power it.
The valuations look expensive, but the earnings growth has been strong enough to justify the premium. With nine of the twelve connected to AI, the theme remains both a risk and an opportunity. One weak quarter from a bellwether like Nvidia $NVDA ( ▼ 0.53% ) could shake sentiment, but for now the growth story is holding.
Three names stand out as more vulnerable. Palantir $PLTR ( ▲ 2.16% ) is the most expensive with a PEG ratio of 2.3 and only 31 percent of analysts rating it a Buy. KLA $KLAC ( ▲ 0.53% ) has lost two Buy ratings in the past few months and now sits at about 40 percent Buy ratings. Intel $INTC ( ▲ 2.25% ) is trading roughly 13 percent above the average analyst price target and has only 12 percent Buy ratings.
The rest of the group may keep riding momentum into 2026, but Palantir, KLA, and Intel are priced for perfection. Any stumble could reset expectations in a hurry.