Palantir knocked off its throne - this surging stock just took S&P 500’s top spot

Best performing S&P 500 stock 2025: Palantir Technologies, the AI defense contractor once in the spotlight for its massive rise and $370 billion valuation, has been dethroned as the best-performing stock in the S&P 500, as per a report. After soaring nearly 2,000% since its October 2020 IPO and earning a top spot in the S&P 500, Palantir now finds itself trailing behind a surprising new leader, according to The Street.

Seagate Surges Past Palantir as S&P 500’s Best-Performing Stock

That leader is Seagate Technology, a company known for its hard disk drives, which quietly surged past Palantir in the past week after a strong 10% rally in its shares, as per the report. With a year-to-date gain of 113%, Seagate has climbed to the very top of the S&P 500’s leaderboard, pushing Palantir down to second place, according to The Street.

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How AI and Cloud Computing Are Driving Seagate’s Growth

Seagate’s recent success isn’t a fluke. The company has ridden the wave of hyperscale computing and the explosive growth in AI, with cloud service providers driving an insatiable demand for more storage capacity, as reported by The Street. In its fiscal year ending June 2025, Seagate reported revenue growth of over 39%, fueled by customers building massive new data centers, according to the report.

Not only are sales booming, but Seagate is also seeing improved profitability. Its gross margins hit a record 37.9% over the last year, due to higher adoption of its high-capacity nearline products and strategic pricing moves, as per The Street.

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At the heart of Seagate’s growth is its cutting-edge hard drives. The company recently announced an average capacity of 13 terabytes per drive, with some customers already demanding larger 28-terabyte drives, according to the report. These big storage units are flying off the shelves, with revenue from nearline products up 52% compared to the previous year, as per The Street report.

To put it in perspective, Seagate shipped over 162 exabytes of storage in its last quarter alone, enough to hold the equivalent of data stored on more than 1.265 billion iPhones, as reported by The Street.

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Western Digital: Seagate’s Close Competitor in the Storage Race

Seagate isn’t the only player benefiting from the AI-driven storage boom. Western Digital, another major storage company and a fierce competitor of Palantir, has also doubled in value this year and currently holds the third spot in S&P 500 year-to-date returns, according to The Street report.

FAQs

Why did Seagate overtake Palantir as the top S&P 500 stock?
Seagate’s growth is fueled by huge demand for storage from AI and cloud data centers, pushing its stock higher than Palantir’s recently.

Is Palantir still a strong stock despite losing the top spot?
Yes, Palantir remains a major player in AI and defense tech, but Seagate’s recent gains reflect a shift in investor focus toward data storage.