9 Stocks Outperforming the Market

Key Takeaways

• Energy, materials, and industrial stocks have outperformed the market since October, led by gains in nine key companies.
• Rising demand for power and infrastructure has supported several industrial winners.
• Different factors, including geopolitical developments, commodity prices, and investment spending, are driving performance across sectors.

A rotation of cyclical sectors since early October is helping to lift energy, materials, and industrial companies ahead of the broader stock market, with gains concentrated among a small group driving much of that advance.

Between Oct. 1, 2025, and early March 2026, the Morningstar US Energy Capped Index gained about 23%, the Morningstar Basic Materials Index rose roughly 21%, and the Morningstar Industrials Index advanced about 20%. Much of that performance came from nine companies whose combination of large index weightings and strong gains accounted for an outsized share of returns.

We screened these three sectors for their leading contributors since Oct. 1, 2025. Although they are grouped together as market winners, analysts say they are benefiting from distinct forces, including power infrastructure investment, commodity trends, and geopolitical developments. Companies newly viewed beneficiaries of data center electricity demand may face greater valuation sensitivity if expectations moderate, while others remain supported by longer-standing business fundamentals.

Industrials: Power Demand Drives the Biggest Winners

Caterpillar CAT was among the largest contributors to the industrial sector’s gains, with shares rising roughly 62% during the period and contributing around 2.5 percentage points to the Industrials Index’s performance. Morningstar equity analyst George Maglares says investors increasingly view the firm as a beneficiary of rising electricity demand tied to data centers. “These activities are further afield of what most regard as its core business, which is earth-moving machinery,” he says. Shares now reflect expanding expectations around power infrastructure demand, which Maglares says could introduce risks to the downside if those assumptions moderate.

GE Vernova GEV also ranked among the leading contributors, gaining more than 40% and contributing around 2 percentage points to the index, as turbine demand expectations strengthened. Morningstar equity analyst Brett Castelli says pricing strength has supported profitability: “The company is experiencing strong pricing and margin growth, in large part due to AI-related demand.”

Meanwhile, GE Aerospace GE, which gained about 15% and contributed around 1.8 percentage points to the index, has benefited primarily from strength in commercial aviation rather than power generation demand. “I don’t see the power gen story being meaningful for GE Aerospace either way,” says Morningstar equity analyst Nicholas Owens.

Materials: Commodity Strength Meets Defensive Stability

In basic materials, Newmont NEM rose roughly 48% and Freeport-McMoRan FCX was up 74%, making for some of the strongest gains. Together the stocks account for more than 7 percentage points of the sector’s returns during the screening period. Copper exposure and gold price strength helped drive investor positioning toward mining companies.

Industrial gas producer Linde LIN rose a more modest 6%, but it still contributed around 2 percentage points to the sector’s returns due to its size in the Basic Materials Index. Morningstar equity analyst Krzysztof Smalec says Linde’s contract structure stabilizes performance: “Volumes are driven by industrial production, so Linde would definitely benefit from a rebound in manufacturing. But at the same time, they’re protected on the downside by their contract structure.”

Energy: Investment Expectations Lift Services Firms

Energy delivered the strongest sector gains, led by integrated oil majors and oilfield services firms. Exxon Mobil XOM, the index’s largest holding, gained roughly 34% and contributed nearly 7 percentage points to the sector’s performance, while Chevron CVX rose about 22% and contributed more than 3 points. Oilfield services firm SLB SLB surged nearly 53%, making it one of the sector’s strongest performers despite its smaller weighting.

Morningstar equity analyst Joshua Aguilar says geopolitical developments and investment expectations drove gains. “For SLB and the energy sector, it’s a combination of Venezuela and geopolitical premium with Iran,” he says. He adds that services firms like SLB ”disproportionately benefit from this investment.” He thinks part of the rally reflects valuation normalization after the stock traded at a prolonged discount, though he remains “skeptical” about how much incremental upside remains.