The 8 Top-Performing S&P 500 Stocks of 2020

Needless to say. 2020 was a roller-coaster ride for the S&P 500 (SNPINDEX:^GSPC), as well as the markets in general. The index started off the year where it had ended 2019, hitting new highs and continuing its upward trajectory, only to be completely blindsided by the coronavirus pandemic about to begin.

In the span of a single month, the S&P 500 wiped out over two years' worth of gains, at one point falling below 2,200. But it then made a miraculous recovery and stormed to record highs, ending the year some 70% above that low point.

While most stocks rallied, here are the eight companies in the S&P 500 index that performed the best in 2020.

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Although Advanced Micro Devices (NASDAQ: AMD) dropped 34% from the highs it reached in February, the chipmaker was already rebounding while the index itself was still falling. From trough to peak, AMD rose 134% and ended the year having doubled in value.

Throughout 2020 it would race ahead, then plateau, only to soar once more. Its latest growth spurt is tied to having won placement in the new video game consoles from Microsoft and Sony, which are flying off the shelves and remain in short supply from the overwhelming demand for them.

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Specialty chemicals producer Albemarle (NYSE: ALB) has been a steady performer all year long, bar that one hiccup in March. Its shares have more than doubled this year as the electric vehicle market, which uses the company's lithium as a key battery component, drove higher -- particularly as Chinese EV makers like Li Auto, NIO, and XPeng grabbed the imaginations of investors.

Albemarle's recent earnings were disappointing, but the market seems hopeful this lithium producer will have enough juice to keep its stock charged for the foreseeable future.

Distancing itself from the Victoria's Secret lingerie brand might have been the best thing L Brands (NYSE: LB) could have done for its performance. Although the original planned sale of the business to Sycamore Partners fell apart because of the pandemic, L Brands' go-forward program to create a stand-alone company for Victoria's Secret has found favor with the market, even though it's still a drag on performance.

That's because the remaining Bath & Body Works business has been such a standout. And by focusing on this stronger operation, L Brands ought to be a better stock itself, though the doubling of its shares may mean all the good news is already baked in.

Digital payment platform PayPal Holdings (NASDAQ: PYPL) was a business made for the pandemic, as social distancing put contactless forms of payment in high demand. Last quarter the company added 15.2 million new accounts to its rolls, which combined with those it added in the previous quarter, means PayPal has added in six months the same number of new users that it did in all of 2019. And its Venmo peer-to-peer payment service boasts 361 million users, up 22% year over year.

That alone suggests PayPal has become more than just a payments processing platform, and now it is getting into processing cryptocurrency transactions, a seemingly logical progression for where money is heading.

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Another chipmaker that's been a solid performer this year, NVIDIA (NASDAQ: NVDA) gained as the playing of video games became a daily routine for many during the pandemic's lockdown. NVIDIA's advanced graphics cards have become the industry standards, but its entrance into data centers is what has many investors excited. Just this year the segment outpaced gaming revenue for the first time. While NVIDIA's shares have jumped 120% this year, there's no reason they can't keep running higher.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Carrier Global's (NYSE: CARR) inclusion on this list comes with an asterisk because it was spun off in April of this year from what was to become Raytheon Technologies, the merger of Raytheon and Carrier's former parent, United Technologies (also spun off was Otis Worldwide). All three companies are in the S&P 500, and because of United's position as a Dividend Aristocrat, or a stock that has increased its dividend for 25 years or more, they're included in that rarefied group of companies, too.

Carrier, though, has far outperformed both Otis and Raytheon as it benefits from the wave of consolidation in the HVAC industry, growing urbanization, and overseas opportunities. However, Carrier's performance is not a full-year one.

Etsy (NASDAQ: ETSY) was launched into the stratosphere at the outset of the pandemic when face masks became obligatory but were in short supply. Suddenly, everyone was turning to the third-party e-commerce site to buy personal protective equipment. CEO Josh Silverman told Fortune at the time that traffic to the site spiked with people specifically searching for the term "face mask." At one point, searches for the term hit nine per second. While face mask demand may have eased up a lot as more manufacturers produced them, demand for Etsy's marketplace continues unabated.

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Like Carrier, Tesla's (NASDAQ: TSLA) inclusion on this list of the S&P 500's top performers this year also comes with an asterisk because it was only added to the index on Dec. 21, so its electrified performance among the unwashed masses of nonindex stocks catapulted it to the top of the list when it was added at year's end. Not that that matters as its $629 billion market value is five times greater than the combined capitalization of Ford Motor Company, General Motors, and Fiat Chrysler.

Tesla is building out new factories to produce more of its electric vehicles, and it plans to double capital spending next year. While Apple is garnering headlines with plans to potentially build an electric iCar, Tesla has such a head start that it should have nothing to worry about.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

It's clear 2020 was a unique year for the stock market, from its dramatic fall from grace to its equally powerful resurrection. While there appears to be life left in this bull market as we head into 2021, investors shouldn't count on a repeat performance.

Even so, some of the stocks on this list of top performers in 2020 do appear to have the wherewithal to keep their engines running, and it won't be surprising if we find that the cream rises to the top again next year.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple, Etsy, Microsoft, NVIDIA, PayPal Holdings, and Tesla and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool has a disclosure policy.