These Were the 5 Top-Performing Stocks in the S&P 500 in July 2025

Key Points

• These top performers all gained 25% or more in July compared to just 2% for the S&P 500.

• Only two of those five are up for August so far.

• 10 stocks we like better than Invesco ›

There were only 22 trading days in July. But that was all the time that the five best-performing S&P 500 stocks that month needed to gain 24% or more. This quintet raced past the 2% return of the S&P 500 and undoubtedly made their shareholders quite happy.

Should investors expect more such gains from these five stocks as the rest of 2025 progresses, or should they expect pullbacks? Turns out, this is probably the entirely wrong question to be asking.

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Image source: Getty Images.

Meet the five best stocks in July

According to data from Google Finance, the five best-performing S&P 500 stocks in July were 1. Generac (NYSE: GNRC), 2. Invesco (NYSE: IVZ), 3. Norwegian Cruise Line (NYSE: NCLH), 4. AES (NYSE: AES), and 5. GE Vernova (NYSE: GEV). Each stock gained between 24% and 36% during the month.

Data by YCharts.

Now, here are some interesting observations about those stocks:

• Four out of these five stocks were up in 2024, and three outperformed the S&P 500.
• Only GE Vernova stock was up year to date in the first half of 2025, gaining 61% compared to a less than 6% gain for the S&P 500.
• As of Aug. 28, only two of these five have posted positive returns in August -- Invesco and AES.

Do you see a pattern here with the five top-performing stocks from July? If you don't, then congratulations. I submit that there's no pattern there.

Wait, what?

While it's exciting when a stock performs well, measuring stock performance over a single month doesn't usually lead to actionable takeaways. It's simply too short a time horizon to be meaningful.

There's data to back this up. Boston Consulting Group published a study in 2006 showing top stock performers over rolling 1-year, 3-year, 5-year, and 10-year periods. Among the single-year performers, a stock's valuation was the biggest contributing factor. Put another way, when time horizons shrink, the correlations between a company's business results and its stock price also fade. When short-term thinking rises, the importance of a stock's valuation also rises.

Therefore, to predict how a stock will perform over any short time period, investors need to know how to predict how it will be valued by the market.

Therein lies the problem. Valuations have a lot to do with investor sentiment, which is fickle. Consider Nvidia as an example. Back in late 2018, investors worried about the company's long-term prospects, and the stock dropped to around 6 times sales. Today, investors feel much better about its future, and it trades at 30 times sales.

Data by YCharts.

Granted, Nvidia's profit margins have skyrocketed, which has contributed greatly to its higher valuation. But if investors believed its margins were under threat long-term, the valuation would come down.

Consequently, investors can't really draw any conclusions from July's winners -- or the winners from any month, for that matter. Some stocks will do poorly in a given month, and others will do well. In isolation, their recent history doesn't offer much data with which to predict future movements.

So what can investors do?

I believe that there are two things that investors can do with this information.

First, accept at the outset that there will always be ups and downs in the stock market -- this is known as volatility. Investors who can't accept this try to avoid it. This can lead people to sell stocks at exactly the wrong time. It's better for your long-term results as an investor to accept that volatility is simply part of the deal.

Second, if investors can't predict stocks' valuations, then they can pay attention to a far better indicator of future performance than valuation: business fundamentals.

Take Invesco, for example. It was one of the big winners in July, but there was a good business reason for that. The company manages many popular exchange-traded funds (ETFs), including Invesco QQQ Trust (NASDAQ: QQQ). But management is now trying to change that ETF's structure from a unit investment trust to an open-ended structure. The short explanation is that this will allow Invesco to profit more than ever before from its popular ETF. That's a business move that could benefit the stock long term.

I don't know what Invesco stock will do next month -- it could go up or down with valuation changes. But the pending change to its business is something that I can reasonably measure and project.

Stock movements during any single month remind us that, in the short term, investing can be volatile. But long-term, businesses that perform well can drive positive returns for shareholders. That's why investors should embrace volatility and focus on business results.

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool recommends Ge Vernova. The Motley Fool has a disclosure policy.