If You Want to Beat the Market, Start With These 3 Stocks

Investors are concerned about where the stock market is headed this year. While the S&P 500 has maintained upward momentum, the narrative has shifted toward significant sector dispersion. If you are worried about economic uncertainties, focusing on businesses with massive infrastructure investments and clear growth moats can help you navigate the risk of a late-year downturn.

The S&P 500 is currently tracking toward a 12% annual rally target, but megacap earnings power is doing most of the heavy lifting. To build a portfolio that continues to beat the market, it helps to choose businesses that have strong fundamentals and significant manufacturing or technological advantages. Here are three businesses that are currently outperforming the broader index.

Eli Lilly

If you’re concerned about the market, one solid healthcare business to own is Eli Lilly (NYSE:LLY | LLY Price Prediction | LLY Price Prediction). The company recently reported first-quarter revenue of $19.8 billion, a 56% jump driven by volume growth. While the stock faced a brief technical dip earlier this year, it is currently trading near $991.85, signaling that the market is quickly pricing in its massive expansion plans.

Lilly is not just relying on its current lineup; it recently announced an additional $4.5 billion investment in its Indiana manufacturing sites to meet the global demand for Foundayo and Zepbound. Furthermore, its pipeline progress remains dominant, with the drug Omvoh recently showing four-year durable clearance in ulcerative colitis trials. These developments reinforce Lilly’s position as a long-term compounder.

The stock is inching closer to its 52-week high of $1,133, leading some to speculate that a stock split may be on the horizon. With management raising full-year outlooks based on manufacturing scaling, Eli Lilly remains a top-tier conviction pick for 2026.

Chevron Corporation

A solid dividend stock and a hot stock today, Chevron (NYSE:CVX) is proving to be a cash-flow powerhouse. While crude oil price fluctuations often drive short-term sentiment, Chevron is focusing on production volume, hitting 3.9 million barrels per day. This 15% jump in production over the previous quarter has allowed the company to maintain its status as a top-tier energy beneficiary.

Chevron is currently trading around $190 and offers a reliable dividend yield of 3.73%. Management is on track to achieve $3 billion to $4 billion in structural cost reductions by the end of this year, which directly supports their 38-year streak of dividend increases. The company recently declared a quarterly payout of $1.78 per share, underscoring its commitment to shareholder returns regardless of geopolitical volatility.

With global diversification across Asia, the Americas, and Africa, Chevron remains less exposed to specific regional conflicts than its peers. This structural stability makes it an essential anchor for any market-beating portfolio.

Alphabet

Tech giant Alphabet (NASDAQ: GOOGL | GOOGL Price Prediction) is silencing critics who thought it was late to the AI race. Google Cloud revenue recently surged 63% to $20 billion, with a massive backlog of $460 billion in sales already locked in. The stock, currently trading near $384, has gained over 100% in the past year as its full-stack AI strategy begins to pay dividends.

Beyond search and cloud, Alphabet is expanding its AI moat into defensive and scientific sectors. The Google Threat Intelligence Group recently leveraged AI to thwart a large-scale cyberattack, proving the utility of their models. Additionally, its subsidiary Isomorphic Labs just secured a $2.1 billion funding round to use AlphaFold for drug discovery, creating high-value synergies in the biotech space.

Alphabet plans to spend up to $190 billion in capex this year to maintain its lead. While the stock trades at a premium, its trajectory toward a $500 price target remains supported by its dominant infrastructure and diversified AI applications.

Editor’s Note: This article was updated on May 12, 2026, to reflect Alphabet’s recent $2.1 billion Isomorphic Labs raise and Eli Lilly’s $4.5 billion manufacturing expansion. Market projections have been adjusted to account for current sector dispersion and updated stock prices for Lilly ($991.85) and Alphabet ($384).