By Nate Wolf and Mackenzie Tatananni

The third quarter of 2025 gave us the Federal Reserve's first interest-rate cut of the year, President Donald Trump's sweeping tax-and-spending bill, and a rare September market rally. The S&P 500 index climbed 7.3% in the quarter, but as always, individual stocks diverged wildly.

AppLovin was the top stock in the index for the third quarter, rising 104%. The company, which provides monetization tools to mobile app developers, is one of the newest members of the S&P 500, making the cut in September. That inclusion gave AppLovin stock a boost, but the company was already set for gains after a strong second-quarter earnings print.

Data-storage company Western Digital climbed 84% to $117.81 in the quarter, buoyed by a surge in demand for hard disk drives at data centers. Wall Street was still catching up to that spike in recent weeks. Analysts at Morgan Stanley named Western Digital a "top pick" and gave the stock a price target of $99 in early September. The same analysts nearly doubled their price target to $171 fewer than four weeks later.

Warner Bros. Discovery was the third-best performer in the index, soaring 65%. Nearly all of that gain came earlier this month, when The Wall Street Journal reported that Paramount Skydance was planning a takeover bid for the entertainment company. Analysts have warned that Warner Bros.' stock gains could fade as the potential merger drags on.

Seagate Technology jumped 57% in the quarter, joining its competitor Western Digital as a major beneficiary of the growing demand for data-storage hardware. The two stocks have been in sync this year: Seagate shares have climbed 167% in 2025, while Western Digital has risen a near-identical 161%.

Corning rounded out the top five, with shares rising 53% for the quarter. The glassmaker's stock was a darling of the dot-com era -- its all-time high came in 2000 -- and has surged back to relevance as an Apple supplier and an artificial-intelligence play. The company is a leading producer of fiber optics, a key component in data centers, analysts at UBS noted earlier this month.

Gartner had the worst quarter out of all stocks in the index, falling 36%. The technology-centered research firm's woes began in earnest last month, when it cut its full-year revenue forecast. On the earnings call on Aug. 5, CEO Gene Hall remarked that confidence among CEOs in the U.S. had fallen to recessionary levels. His comments triggered a massive slide in the stock, which closed at its lowest level in three years and saw its largest same-day percent decrease since 1999.

Molina Healthcare sank 35% in the quarter. At the beginning of July, the healthcare company trimmed its full-year guidance by 10%, citing higher-than-expected medical costs across all lines of business. Two weeks later, Molina posted mixed second-quarter earnings. CEO Joseph Zubretsky identified "a temporary dislocation between premium rates and medical cost trend which has recently accelerated" on a call with analysts.

FactSet Research Systems also slumped 35%. The stock sank earlier this month after the company's fiscal-year adjusted earnings guidance missed forecasts and fiscal-fourth-quarter earnings came in below expectations, overshadowing a slight revenue beat.

Healthcare insurer Centene's stock also declined 35%. Like Molina, the company yanked its full-year guidance on July 2, ahead of quarterly results. Ballooning medical costs caused the health insurer to report a surprise second-quarter loss. Centene's health benefits ratio, which tracks the proportion of its premiums paid out to cover medical expenses, swelled to 93% from 87.6% in the year-ago period.

Align Technology fell 34%. The Invisalign maker's second-quarter earnings and revenue both came in below consensus estimates, as less affordable financing options for orthodontic procedures and general macroeconomic uncertainty appeared to affect results. CEO Joe Hogan noted that dental industry surveys suggested there was less patient traffic and fewer orthodontic case starts in the quarter.

Write to Nate Wolf at nate.wolf@barrons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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September 30, 2025 15:59 ET (19:59 GMT)

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