US stocks outperformed ASX shares for a third consecutive year in 2025.
The S&P 500 Index (SP: INX) soared 16.39% and delivered total returns, including dividends, of 17.88%, according to S&P Global.
The S&P 500 reached a record 6,945.77 points in December before closing the year at 6,845.5 points.
The Nasdaq Composite Index (NASDAQ: .IXIC) did even better, rising 20.36% with total returns of 21.33%.
The Nasdaq Composite hit its peak in October at 24,019.99 points before closing at 23,241.99 points on 31 December.
The Dow Jones Industrial Average Index (DJX: .DJI), which tracks the performance of 30 selected S&P 500 stocks, rose 12.97% and delivered total returns of 14.92%.
The Dow Jones Index closed 2025 at 48,063.29 points, and hit a new record overnight at 49,209.95 points.
By comparison, S&P/ASX 200 Index (ASX: XJO) shares rose 6.8% and produced total returns of 10.32% in 2025.
The ASX 200 rose to a record 9,115.2 points in October before finishing the year at 8,714.3 points.
The S&P/ASX All Ords Index (ASX: XAO), which tracks the top 500 companies, rose by 7.11% and gave a total return of 10.56%.
The ASX All Ords closed 2025 at 9,018.8 points after hitting a record in October at 9,414.6 points.
Top 5 US stocks and ASX shares of 2025
According to Yahoo Finance, the top five US stocks for growth last year were:
1. Flash memory designer and manufacturer Sandisk Corp (NASDAQ: SNDK), up 548%
2. Data storage company and hardware manufacturer, Western Digital Corp (NASDAQ: WDC), up 335%
3. Computer data storage company, Micron Technology Inc (NASDAQ: MU), up 222%
4. Global data storage solutions company, Seagate Technology Holdings PLC (NASDAQ: STX), up 220%
5. US stocks trading platform provider, Robinhood Markets, Inc. (NASDAQ: HOOD), up 183%
The top five ASX All Ords shares for growth were:
1. Anti-drone technology company DroneShield Ltd (ASX: DRO), up 300%
2. Gold miner Pantoro Gold Ltd (ASX: PNR), up 220%
3. Gold explorer Predictive Discovery Ltd (ASX: PDI), up 220%
4. Gold miner Resolute Mining Ltd (ASX: RSG), up 206%
5. Lithium miner Core Lithium Ltd (ASX: CXO), up 206%
Check out the best performing ASX 200 shares here.
What's next for US stocks in 2026?
In its 2026 investment outlook, Morgan Stanley projected that S&P 500 shares will rise to 7,800 points by the end of the new year.
That would represent an annual gain of 13%.
The broker expects US earnings and cash flow growth due to a market-friendly policy mix, interest rate cuts, corporate tax cuts from the 'One Big Beautiful Act', positive operating leverage, and the re-emergence of pricing power and AI-driven efficiency gains.
Serena Tang, Morgan Stanley's Chief Global Cross-Asset Strategist, said:
There will be some bumps along the way, but we believe that the bull market is intact.
Another broker, UBS, predicts the S&P 500 will lift to 7,300 points by June and 7,700 points by Christmas.
UBS said US stocks will be driven by about 10% earnings growth and lower interest rates.
In an article, the broker said:
In addition to the transformative force of AI, we believe the structural trends of electrification and longevity will also drive equity performance for the long term.
Tactically, we believe AI beneficiaries are broadening out both within and beyond tech, and we see opportunities in companies facilitating grid modernization and supply critical raw materials.
In the longevity field, we expect strong growth in the obesity, oncology, and medical device markets.
Check out which US stocks are most popular with Aussie investors and why.
