Last year was a good one to be a stock investor. The broad stock market hummed along in 2025, with the S&P 500 posting a 16% return — the index’s third consecutive year of double-digit gains.
Of course, had you owned certain stocks, you could have done quite a bit better.
Microchip giant Nvidia returned almost 40% on the year, for instance, and Google parent company Alphabet rose by about 65%.
But a few names you likely haven’t heard of performed even better. Consider the Russell 1000 index, which tracks roughly 1,000 U.S.-traded stocks, including small, midsize and large-company names. Among the top-10 performers of 2025, Robinhood, at No. 6, is the first household name.
The big winner: Lumentum Holdings, a firm whose specialized equipment helps power AI data centers. The stock rose 339% last year as investors bet on the company’s ability to reap profit from continued growth in AI.
You could log into your brokerage’s stock screener tool and run the same exercise with bigger or smaller stocks, or ones within a particular sector, and get your very own investor version of “Spotify Wrapped.” The question is, in any given year, or within any given index, are the previous year’s winners worth buying?
Probably not, says Jeff Ptak, managing director for Morningstar Research Services — at least not on the basis of their recent performance alone.
“They’re certainly going to have a certain seductive appeal. Who doesn’t love eye-popping returns?” he says. “The problem is, you’re talking about the most extreme of the extreme.”
Often, Ptak says, the previous years’ biggest winners have bounced back from some sort of financial distress or have had their prices inflated by exuberant investors — both phenomena that could lead to stocks becoming overvalued.
“In general, it’s a very bad idea to be fishing from those waters,” he says.
How to treat winners in your portfolio
Investing pros generally advise that you set up some key guardrails if you hope to invest in individual stocks. To avoid the risk of a decline in any one investment tanking your performance, experts often advise that you invest most of your assets in a broadly diversified portfolio. Consider talking with a financial advisor about setting up a portfolio that works for you.
You’d also be wise to invest on the basis of a stock’s underlying fundamentals — such as earnings growth, margins and cash flows — rather than trying to time movements in its price, says Sam Stovall, chief investment strategist at CFRA.
“Don’t try to time the market with the bulk of your portfolio,” he says. And if you do want to dabble in individual stocks, “don’t buy on margin, don’t over-leverage yourself and risk what you can afford to lose.”
While you may not want to add last year’s winners as new positions in your portfolio, you’d be smart to hang on to any high performers you may already own, rather than selling them, Stovall says.
“Historically, you are better off letting your winners ride, because after down years is when you want to buy last year’s losers,” he says. “But after up years is when you want to own last year’s winners.”
Since 1990, stocks in the three best-performing sectors from the previous year have outpaced the S&P 500 by about three percentage points per year, on average, and outperformed the market about 70% of the time, according to CFRA.
In other words, historically, high-performing stocks tend to keep the good times rolling as a group after years when the broad market performed well. That makes sense, says Stovall, as investors who have enjoyed a big win on paper are likely to look for future gains — and even recommend a winning position to their friends.
Want to get ahead at work with AI? Sign up for CNBC’s new online course, Beyond the Basics: How to Use AI to Supercharge Your Work. Learn advanced AI skills like building custom GPTs and using AI agents to boost your productivity today. Use coupon code EARLYBIRD for 25% off. Offer valid from Jan. 5 to Jan. 19, 2026. Terms apply.
