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2025 Stock Market Surprise: Energy & Materials Stocks Outperform Tech

  //stocks-investing.news-articles.net/content/202 .. ise-energy-materials-stocks-outperform-tech.html
  Published in Stocks and Investing on Wednesday, January 7th 2026 at 12:50 GMT by CNBC
      Locale: New York, UNITED STATES

Beyond the Hype: The Top Performing Stocks of 2025 – A Shift in Market Leadership

The year 2025 saw a surprising shakeup in the stock market, deviating from predictions that centered on established tech giants like Alphabet (Google) and Nvidia. While these companies remained solid performers, they were outperformed significantly by a new cohort of stocks, driven by sectors like energy, materials, and a resurgence in value investing. A recent CNBC article details this shift, revealing the top-performing stocks of 2025 and the underlying reasons for their success. This summary dives into those findings, explores the key drivers, and examines what this trend suggests about the future of investment strategies.

According to CNBC’s analysis, the leading stocks of 2025 were not the usual suspects dominating headlines. Instead, Cleveland-Cliffs (CLF) topped the list with a staggering 168% gain, followed by Energy Transfer LP (ET) at 152%, International Paper (IP) with 135%, MP Materials (MP) achieving 128%, and Phillips 66 (PSX) rounding out the top five with a 121% increase. This represents a dramatic departure from the 2023-2024 narrative dominated by the “Magnificent Seven” – Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta.

So, what fueled this surprising performance? The CNBC article points to several converging factors. Firstly, the latter half of 2024 and the beginning of 2025 witnessed a significant rebound in commodity prices. Demand, particularly from developing economies, outstripped supply in areas like steel, oil, and rare earth minerals. Cleveland-Cliffs, a major player in iron ore and steel production, directly benefited from these price increases. The company had already invested heavily in upgrading its facilities and streamlining operations, making it well-positioned to capitalize on the increased demand.

Energy Transfer LP, a midstream energy company focused on pipelines and storage, also benefited immensely. Despite increasing discussion about renewable energy, global demand for fossil fuels remained surprisingly robust, particularly as air travel recovered and geopolitical instability disrupted supply chains. (Further analysis on Energy Transfer’s performance can be found on their investor relations page: [ https://ir.energytransfer.com/ ]). The company’s infrastructure proved crucial in moving oil and natural gas, leading to strong earnings and investor confidence.

The strength of International Paper and MP Materials represents another key trend: the re-evaluation of materials stocks. International Paper, a leading packaging company, profited from continued strong consumer demand, even amidst inflationary pressures. Packaging is relatively inelastic – people still need goods delivered – making it a dependable sector. More interestingly, MP Materials, a rare earth element mining and processing company, experienced explosive growth. Rare earth elements are critical components in everything from electric vehicles and wind turbines to smartphones and defense systems. The U.S. government's push to onshore rare earth mineral processing, coupled with increasing global demand, created a perfect storm for MP Materials. The company is strategically positioned to reduce America's reliance on China for these crucial materials, aligning with national security priorities and driving investor enthusiasm. (Details on MP Materials’ operations and rare earth element importance are available on their website: [ https://mpmaterials.com/ ]).

Finally, Phillips 66, a diversified energy manufacturing and logistics company, enjoyed a strong year due to refining margins and a disciplined approach to capital allocation. Like Energy Transfer, it benefited from continued demand for gasoline and other refined products.

The CNBC article highlights a broader shift in investor sentiment. For the past several years, growth stocks, particularly those in the technology sector, enjoyed a prolonged bull run. However, 2025 saw a growing interest in “value investing” – focusing on companies that are fundamentally undervalued by the market. This strategy gained traction as investors sought safety and stability in a volatile global environment and considered that tech stock valuations had reached unsustainable levels. The outperformance of these materials and energy stocks suggests a rotation out of high-growth, high-valuation tech stocks and into more traditional, cash-generating businesses.

This doesn’t signal the death of tech, but rather a correction and a rebalancing of the market. Alphabet and Nvidia still posted positive returns in 2025, but their growth rates were significantly lower than the top performers. This suggests that investors are becoming more discerning, demanding strong fundamentals and tangible earnings rather than simply betting on future potential.

In conclusion, the best-performing stocks of 2025 weren’t the expected tech titans. Instead, a combination of commodity price increases, strategic government initiatives, and a renewed focus on value investing propelled companies in the energy, materials, and industrial sectors to the forefront. This shift in market leadership serves as a reminder that investment landscapes are dynamic, and diversification across sectors is crucial for long-term success. The year 2025 signals a potential turning point, suggesting that the future of investing may favor companies with strong fundamentals and demonstrable profitability over speculative growth narratives.