In this article, we will take a look at three stocks with the largest 52-week gains in the S&P 500. I’ll go over what each company does, how much their stock has returned, and some of the reasons the shares have done well.
Unsurprisingly, all of these stocks are connected in some way to the generative artificial intelligence rally that has been the driving force in the market recently. One helps provide the electricity needed to power data centers, and the other two make key hardware needed to build data centers.
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Vistra Corp (VST)
The first name on our list of stocks with the largest 52-week gains is Vistra Corp (NYSE:VST). If you asked someone which S&P 500 stock has performed the best over the past year, many people would go for a popular name, NVIDIA (NASDAQ:NVDA). They would not be far off, as NVIDIA is the second-best performing stock, just after Vistra Corp. NVIDIA has returned 139% over the past 52 weeks while Vistra has managed 162%.
Vistra is a power generation company that provides electricity to consumers and businesses. Vistra uses a variety of methods to generate electricity, including natural gas, coal, nuclear, and solar. The market believes that the amount of electricity data centers use will continue increasing to power AI. This is going to increase the price of electricity they use.
Vistra differentiates itself as it is an independent electricity utility as opposed to a regulated one, meaning it can sell its electricity at market prices. Regulated utilities must sell at prices set by regulatory authorities. This allows it to increase prices and grow earnings.
Vistra has also been busy acquiring more nuclear plants this year, a clean source of energy that data center builders want to use.
Super Micro Computer (SMCI)
The next name on our list of stocks with the largest 52-week gains is Super Micro Computer (NASDAQ:SMCI). In some ways, Super Micro Computer is directly connected to Vistra Corp. Within data centers are thousands of servers, typically stacked on top of each other in what is called a rack, performing the computing work to manage data and run applications. Super Micro Computer makes those servers and the racks that they are stored on, while Vistra Corp provides the electricity powering them.
Over the past 52 weeks, Super Micro Computer has returned 109%. The AI boom is driving demand for Super Micro’s products. Its net income rose 370% from Q2 2023 to Q2 2024.
One big selling point for Super Micro’s products is energy efficiency. This is hugely important for data centers because they use a lot of electricity, somewhere between 1% and 3% of the world’s total consumption. This makes Super Micro’s products a leading choice to keep costs down and contribute to ESG (Environmental, Social, and Governance) goals when companies are building data centers.
Arista Networks (ANET)
The last name on our list of stocks with the largest 52-week gains is Arista Networks (NYSE:ANET). Arista designs products that move data to different devices within data centers. This includes things like Ethernet switches and routing solutions. The company also provides software to go along with its hardware.
One key differentiator that Arista has over competitors such as Cisco (NASDAQ:CSCO) is its commitment to using an open architecture. The open architecture enables significantly more customization in programming a network, boosting flexibility in how various software can communicate with each other. Also, Arista’s modular hardware lets users upgrade or replace parts without harming other components.
These key differences have made Arista the top choice in networking solutions when it comes to data centers and high-performance computing. Arista Networks’ net income has grown by 46% from fiscal Q1 2023 to fiscal Q1 2024, and shares are up 112% over the past 52 weeks.
On the date of publication, Leo Miller did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.