The stock market started strong in 2025, but in recent weeks, news of trade wars and tariffs has hammered the markets. Year to date, the S&P 500 is now down nearly 4.5%, and many investors are worried that there could be further declines coming.
Three stocks that have outperformed the index by a wide mile are CVS Health (CVS 1.37%), Super Micro Computer (SMCI -9.63%), and Philip Morris International (PM -1.20%). Why are these stocks doing so well, and can their impressive rallies continue? Let’s take a closer look.
CVS Health: Up 51% in 2025
The best-performing stock on this list is CVS Health, which has risen sharply by roughly 51% in 2025. The company got a big boost last month after reporting its year-end earnings. It beat expectations, and its guidance for the year was in line with Wall Street expectations.
For investors, it may have come as a pleasant surprise. The company was struggling last year, routinely missing expectations. Ultimately, this led to a change in CEO, with David Joyner taking over from Karen Lynch, and this past quarter was his first full one at the helm. Under the new leadership, investors may be feeling more optimistic about the business, so at least its quarterly numbers may not be as volatile.
Last year, shares of CVS tanked by 43%. That’s also one of the reasons the healthcare stock may have been doing so well in recent weeks — at such a beaten-down valuation, expectations were incredibly low heading into the quarterly results. But investors should tread carefully. While CVS stock is doing better, the company still says medical costs remain high, and that’s been a problem for a while. The good news is that at 18 times trailing earnings, this still isn’t an expensive stock to own, despite the strong rally.
However, there’s still a fair bit of uncertainty ahead, especially with President Donald Trump looking to cut costs in ways that are likely to affect multiple industries, including healthcare. Investors may want to consider holding off on buying CVS stock for now, as the company could still face a turbulent path ahead.
Super Micro Computer: Up 26.5% in 2025
Another surging stock is Super Micro Computer. The company was heading into 2025 with a lot of question marks about its financial statements and whether it would file its quarterly and annual reports on time. Last year, its auditor, Ernst & Young, resigned over concerns relating to internal controls and board independence.
In February, the company filed its financial statements on time, with its new auditor, BDO, not raising any flags. That averted disaster, as there are now no imminent concerns of an exchange delisting, and investors appear to be eagerly buying up the stock again. Supermicro’s IT infrastructure, including servers, has been soaring in demand. Tech companies are building out their artificial intelligence (AI) capabilities as they develop chatbots and next-gen technologies.
Supermicro can be a good buy if you’re bullish on AI, but this is another stock you may want to be careful with. Spending on tech may slow down under more challenging economic conditions. Tariffs may also hurt the company’s already thin margins — Supermicro reported just $2.1 billion in gross profit last year on sales of $14.9 billion, representing just 14% of its top line. This may seem like a cheap AI stock to buy given that it trades at 18 times earnings, but there’s still some risk here.
Philip Morris International: Up 27.9% in 2025
Rounding out this list of top-performing stocks to start 2025 is Philip Morris International. Its shares spiked last month after the tobacco company released its guidance for the year, which came in better than what Wall Street was expecting. It expects that its adjusted earnings per share will come in within a range of $7.04 to $7.17, which is higher than estimates of $7.03.
The stock also got a boost from a recent approval from regulators to market its nicotine pouch, Zyn, in the U.S. Many people believe it’s a safer alternative to cigarettes. However, the American Lung Association isn’t convinced, saying that such pouches often contain many cancer-causing chemicals and their high levels of nicotine make them “incredibly addictive.”
Philip Morris International stock is off to a hot start to the year, but paying 25 times earnings for a business with a questionable future doesn’t look all that enticing. The long-term trend is that tobacco use is coming down. While the current-year guidance may be encouraging, I wouldn’t rush to buy the stock, given its valuation and the question marks ahead.
