Stocks to Thank for This Year's Gains and What to Do With Them Now

Stocks that surged to remarkable highs this year may not maintain the same momentum in 2025, according to Wall Street analysts’ consensus projections.

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The S&P 500 has climbed almost 26% this year, reaching the 6,000 mark on Tuesday as investors heavily favored sectors such as technology, energy, industrials, and utilities. These industries have been bolstered by growth tied to artificial intelligence and increasing expenditures on data centers. However, some of this rally has recently slowed, reflecting changing market expectations for next year, the potential impact of President-elect Trump’s policies in his upcoming term, and broader economic factors.

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For instance, the energy sector has underperformed over the last month. Traders have increased short positions against oil companies, anticipating higher oil production due to Trump’s pro-energy policies. This adjustment in sentiment suggests that some of 2024’s high-flying sectors may not replicate their performance in the year ahead.

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By utilizing CNBC Pro’s stock screener, three standout performers from the S&P 500 this year were identified: Vistra, Palantir Technologies, and Texas Pacific Land. Yet, based on analysts’ consensus price targets, these stocks are expected to deliver modest gains—or even suffer declines—in 2025, according to data from LSEG. Nvidia, which has become the largest U.S. company by market capitalization and another top performer in 2024, remains a notable exception, with continued bullish expectations from analysts.

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Vistra’s Momentum Slows

Shares of Vistra, a Texas-based electric power generation company, have surged over 320% this year. Despite this impressive performance, analysts polled by LSEG give the stock a consensus buy rating but predict that it may rise less than 3% over the next 12 months.

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Vistra has thrived amid the AI-driven market surge, as its gas-fired and nuclear power plants play a critical role in providing energy for power-intensive data centers. During its third-quarter earnings call, the company highlighted its commitment to meeting increasing demand from large-scale data center customers. This includes exploring new construction projects and expanding existing data center facilities. Vistra reported adjusted EBITDA of $1.44 billion for the third quarter, in line with expectations, and announced plans to enhance shareholder value through a share buyback program. Despite these strong fundamentals, analysts foresee limited upside in the near term.

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Palantir Faces Headwinds

Palantir Technologies, another investor favorite in 2024, may face a sharp downturn in 2025. Analysts’ consensus price targets suggest the stock could decline by nearly 42% over the next year.

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The analytics software provider has seen its shares skyrocket almost 277% this year, including a 47% jump in the past month alone. This recent surge was driven by Palantir’s better-than-expected third-quarter earnings and revenue, upward revisions to future profit forecasts, and its decision to transfer its stock listing to the Nasdaq from the New York Stock Exchange. Despite these achievements, analysts are cautious, maintaining a hold rating on the stock due to concerns about sustainability.

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Axon Enterprise’s Potential Challenges

Taser-maker Axon Enterprise, another notable winner this year, could face a challenging 2025 based on analysts’ consensus price targets. While analysts remain broadly optimistic about the company’s prospects, including a consensus buy rating, their projections suggest Axon may see slower growth next year.

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Bank of America analyst Jordan Lyonnais, however, is particularly bullish on Axon’s potential in the AI space. He recently projected that the company could achieve over 25% top-line growth by 2026, driven by its AI Era Plan designed for law enforcement customers. While Axon’s prospects in AI remain promising, near-term challenges could temper its momentum.

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Nvidia and Constellation Energy Shine Bright

Among the year’s big winners, Nvidia and Constellation Energy stand out with relatively strong expectations for 2025. Analysts forecast Nvidia could see approximately 23% upside in the coming year, while Constellation Energy may deliver an 11% gain over the same period.

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Nvidia, a leader in AI and data center technology, has become the largest U.S. company by market value, reflecting its dominant position in key growth areas. Constellation Energy, meanwhile, has benefited from its role in the clean energy transition, making it a favorite among investors seeking exposure to renewable power generation.

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As 2025 approaches, the market’s focus is shifting from this year’s extraordinary gains to a more cautious outlook. The sectors and stocks that led the rally in 2024, such as AI-related energy and technology firms, may face new pressures. Analysts’ price targets indicate that while some stocks could maintain their upward trajectory, others might experience slower growth or even declines.

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This evolving landscape underscores the importance of strategic positioning in the market. Investors may need to recalibrate their portfolios to balance optimism about specific companies, like Nvidia and Constellation Energy, with the potential risks facing others, such as Palantir and Axon.

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