Best S&P 500 Stocks For 2025

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Best S&P 500 Stocks

The S&P 500 is an index which contains 500 US blue chip stocks. It was always an American equity benchmark, but over the last decade, under US exceptionalism, it’s become a global index too, as it accounts for more than half of the current global market cap. Whilst some individual constituents now have values that are in excess, of many national stock exchanges.

Of course, not every stock in the S&P 500 is a winner just because it’s in the index. Nor is a good run during 2024 a guarantee that a stock’s price will perform well in 2025. So what are the best S&P 500 stocks for 2025?Β Here are some suggestions:

United Health (Ticker UNH)

One of America’s largest healthcare providers, United Healthcare has a market cap of $482.0 billion and annual sales of some $371.0 billion.

Like many stocks in the Healthcare sector, United Health had a tough time in 2024, finishing the year down by just over -2.0%. Thanks to a sharp post-election sell-off, on concerns about cuts to US government spending on health, under the Trump administration.

However, those fears may have been overdone, and the shares have rallied by almost +3.70% in the new year so far.

United Healthcare is highly rated among Wall Street analysts with 22 out of the 24 analysts that cover the stock, rating it as a strong buy. The other two rate it as a moderate buy.

The consensus price target for the stock is $640.25 which is +22.0% or $116.0 above the current price at the time of writing.

UNH has grown its revenues by +64.25% over the last 5-years, its earnings by just over +95.0%, and its dividend by more than +111.0%. It’s due to report earnings on January 16th, just 4-days ahead of President Trump’s inauguration.

Carnival Cruise Lines (Ticker CCL)

Consumer Discretionary stocks, of which Carnival is one, enjoyed a buoyant period into the US election when it seemed likely that the Federal Reserve was going to cut interest rates and ease monetary policy, as inflation cooled in the US.

And whilst land-locked leisure stocks such as casino and resort operator Las Vegas Sands saw their rally come to a halt with the Presidential election, Carnival continued to perform throughout November and early December.

Over the last 12-months CCL stock has added +36.50% comfortably outperforming its sector and the wider S&P 500 index.

True, since early December the uptrend has lost momentum indeed the stock has fallen by just over -6.0% in the last month.

However, airline stocks in the US were boosted by blowout earnings from Delta Airlines last week, which beat expectations and showed revenue growth of +9.9.0% year over year.

Crucially, that growth was attributed to an increase in holiday travel which suggests to me that there could be a read across to the cruise lines.

Carnival won’t report earrings for sometimes, however. Royal Caribbean reports towards the end of January
and those numbers could be a catalyst for Carnival.

Wall Street rates the stock as a strong buy and has a price target of $29.36 some 20.0% above the current levels.

Travel and Leisure stocks are still recovering from the pandemic which creates a lot of headroom for their stock prices. if the companies can continue to perform.

Vistra Energy (Ticker VST)

The AI theme has faded in the early part of 2025 with Nvidia down by -11.25% and Palantir by -11.07% despite that, there is little doubt that Artificial Intelligence and Cloud Computing are a growth industry, and one that’s growing very fast, with the market expected to experience compound annual growth or CAGR of +11.44% over the next five years.

The data centres required to run the large language models that drive AI are power-hungry and supplying their power needs without disrupting other consumers is a challenge, however, it’s one, which puts the normally staid utility companies front and centre.

Vistra Energy is one such stock. The Dallas-based generator has seen its share price rally by more than +640.0% in the last two years which might make you think that it’s had its run. However, its rival Constellation Energy saw its share price jump by more than +25.0% on January 10th, as it announced the $26.0 billion takeover of fellow generator Calpine.

The generation and supply of electricity is one of those businesses where economies of scale are paramount. Particularly when your end customers are so-called β€œhyper-scalers” and that points to one thing, further M&A in the sector.

Vistra stock has rallied by +20.0 year to date making it the best performer among its electric power peers and the third best performing S&P 500 stock year to date behind CEG and pharmacy chain Walgreen Boots Alliance.

What is the S&P 500?

The S&P 500 is a cap (valuation) weighted stock market index in the United States, which includes 500 of the largest public companies by market capitalization (market cap).

It’s a common misconception that the companies which make up the index are chosen solely based on this market cap, but in reality, the final decision on which companies are included is down to a committee.

As well as the market cap, the committee also considers metrics such as:

  • Level of liquidity – how easy it is to buy and sell
  • Average trading volume – how often it is bought and sold
  • Listed exchange – must be on the Nasdaq or New York Stock Exchange
  • Domicile – they prefer US-based rather than offshore
  • Ongoing financial stability – is it a safe for investors

Broadly speaking, the S&P 500 is generally considered to be the best overall indicator of the US stock market, covering leaders in practically every sector and representing around 80% of total US market cap.

How to invest in the S&P 500 from the UK

To invest in the S&P 500 from the UK you need an investment account that offers access to US shares, ETFs or SPX derivatives. This is because all the different ways to invest in the Standard & Poors 500 index are denominated in USD. In this guide, we will explain what the S&P 500 is, the different ways to invest in it and what to watch out for.

There are three ways to invest in the S&P from the UK and all come with different risks and costs. The main ways for UK investors to buy the S&P index are:

  • ETFs – exchange-traded funds that mirror the performance of the S&P 500
  • Shares – buy all the shares in the S&P 500 index
  • Derivatives – trade the S&P index and profit when it goes up or down

ETFs

For most investors, the best way to invest in the S&P 500 is to purchase an ETF that tracks the index. This allows any investor (even those with limited cash), to get exposure to the index through the purchase of a single fund, which can have fees as low as 0.05% for the Invesco S&P 500 UCITS ETF (SPXP).

Other options include the Vanguard S&P 500 ETF (VUSA), the iShares Core S&P 500 ETF (CSP1) and the SPDR S&P 500 ETF (SPY).

It’s worth keeping in mind that all ETFs have slight variations in how they track the index, meaning that their returns won’t always perfectly match it. This is known as β€˜tracking error’ and investors will want to choose an ETF that offers a low tracking error at a competitive cost.

Compare ETF investing platforms. (Top tip: Choose an ETF platform with low account and dealing costs like InvestEngine)

Direct stocks

It’s also possible for investors to allocate funds to each of the 500 stocks in the index directly. This would involve making individual buys for every stock on the list. To correctly match the index, this would also need to be done in accordance with the cap weightings, which means having stock #1 as the largest holding in the portfolio, stock #500 as the smallest weighting and stocks in between weighted accordingly.

As you can imagine, this is likely to be very time consuming and very expensive, though it would mean avoiding investment management fees.

Full service brokers will charge a fee for every trade, such as Hargreaves Lansdown (Β£11.95) and AJ Bell (Β£9.95), plus a forex transfer fee (1% for Hargreaves Lansdown and 0.75% for AJ Bell).

This would mean buying the index directly with Β£100,000 could incur an initial cost up to Β£6,975 with Hargreaves Lansdown.

Even β€˜commission free’ brokers will still charge a forex fee, such as Freetrade which charges 0.99%.

Compare platforms for buying US shares. (Top tip: choose a platform with low FX fees like Interactive Brokers)

Derivatives

Finally, it’s possible to invest in the S&P 500 by using derivatives. These are separate financial instruments who’s price movement is derived from another asset, but where the investor doesn’t own the underlying asset itself.

Financial spread betting is one such example, where a trader can place a bet on the future movement of an index, going long if they believe it will go up, or going short if they believe it will go down. The return is based on the bet per index point, and the movement of the index.

Contracts for difference (CFDs) are another common derivative, and these work in a similar way to spread betting. The difference is that you purchase a contract which represents a contract to buy or sell the underlying asset (the S&P 500) at a specified price.

Both of these derivatives come with in-built leverage, meaning both gains and losses are magnified. They usually aren’t recommended for beginner investors.

Futures & Options – these are for more sophisticated and advanced investors, but worth considering if you can be classified as a professional trader.

Compare brokers for trading the S&P 500 (Top tip: Beware high overnight financing charges. You can use a futures broker like Saxo Markets to avoid these).

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