This Stock Dominated the S&P 500 in September 2025

Key Points

• Warner Bros. Discovery was the top-performing stock in the S&P 500 in September.

• Its eye-popping 67% one-month gain has caught investors' attention, but many are leery about where it goes next.

• Shareholders will have to wait for Warner Bros. Discovery's Q3 earnings results.

• 10 stocks we like better than Warner Bros. Discovery ›

Fueled by continued takeover speculation, media and entertainment giant Warner Bros. Discovery (NASDAQ: WBD) just delivered its single-best monthly gain in its 17-year trading history, with a 67% sprint higher in September.

The stock's huge 30-day gain not only led all stocks in the S&P 500 for the month, but also added about $19 billion to its market cap, leaving the New York-based company's stock worth over $48 billion.

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At the same time, this short-term move roughly doubled Warner Bros. Discovery one-year gain to 136%, with the stock closing Sept. 30 at $19.53, close to its 52-week high of $20.24.

What's going on?

While recent SEC filings show new stakes by big-name investors, such as Stanley Druckenmiller, not everyone is buying into the rumor that Paramount Skydance (NASDAQ: PSKY) -- which was taken over by the family of Oracle billionaire Larry Ellison -- will be making a move to take over Warner Bros. Discovery.

Image source: Getty Images.

Beyond the takeover buzz that's likely helped drive the stock up, there's still the reality that Warner Bros. Discovery is carrying more than $34 billion in debt following the 2022 merger with AT&T's Warner Media and Discovery that created the current company.

Fundamentally minded investors will get a look under the hood next month when the multibranded film, TV network, and streaming company is expected to report its third-quarter earnings. As I write this, the analysts tracked by Koyfin have a consensus estimate that Warner Bros. Discovery will deliver a loss of $0.11 per share, vs. $0.05 a year ago, on a 5% year-over-year drop in revenue, to $9.13 billion.

Other key areas of focus include its streaming subscriber base, last reported in Q2 at 125.7 million, with average revenue per user (ARPU) of $7.14, which was down from $8 the year before. Investors will also be tuned into the pipeline of new films, cost-cutting efforts, as well as its ongoing effort to narrow the gap with rival Netflix.

All of these issues could have a much larger impact on Warner Bros' stock price and valuation going forward than the mergers and acquisitions chatter, and determine whether the recent rally has legs.

What investors need to know

Whether it's the earnings report, M&A drama, or something entirely unknown, the fact remains that the majority of analysts who cover Warner Bros. Discovery are currently expecting the recent rally to fade. Fourteen of 24 analysts who cover the stock currently rate Warner Bros. Discovery a hold, with an average 12-month price target of $15.57 -- which is about 20% below its Sept. 30 closing price. To be fair, the remaining 10 analysts still rate Warner Bros. Discovery a buy or a strong buy, and have price targets in place as high as $24 per share.

All companies in this sector face challenges, including an ongoing monthly subscription price war and increasingly expensive media content and production costs. Add in the 100% tariff on foreign-made films that was just proposed by President Donald Trump, and the business climate for Warner Bros. Discovery and the broader group starts to look quite challenging.

Even so, the newly upsized shares of Warner Bros. Discovery have seen their weighting in the S&P 500 communications sector rise commensurately to 5.8% , making it the fourth largest stock in the group, behind megacaps Meta, Alphabet and Netflix.

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Matthew Nesto has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Oracle, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.