We recently published a list of 11 Top Performing European Stocks So Far In 2025. In this article, we are going to take a look at where Banco Santander, S.A. (NYSE:SAN) stands against other best performing European stocks to invest in.
The world economy is hanging by a thread, as the macroeconomic environment consists of trade wars, retaliatory tariffs, and political unrest in Ukraine and the Middle East. It adds to economic uncertainty, with market experts offering cautious economic forecasts. According to EY, the euro area will experience a modest economic turnaround in 2025, and growth is expected to increase from 0.7% last year to 1.3% and 1.8% in 2025 and 2026, respectively. It is forecasted to simmer down to 1.4% in 2027. Among all European countries, Malta is projected to experience the highest GDP growth in 2025 at 4%. EY expects soft employment growth across Europe, driven by demographic challenges and subdued labor demand. Unemployment will likely remain at 2024 levels. While nominal wage this year will clock in higher than pre-pandemic levels, wage growth will take a hit. Central and Eastern European countries are forecasted to experience relatively higher inflation in 2025, while the overall rate remains just over 2% in the euro area.
Meanwhile, German economic institutes have slashed their growth projections for 2025 to 0.1% from the previous forecast of 0.8% in September 2024. This revised estimate does not incorporate the recent tariffs levied by the US. These tariffs will be a major setback for European economies, possibly toppling them over the edge of recession for the third consecutive year. The new conservative government declared a €500 billion fund to improve infrastructure and defence and stimulate growth. The fiscal package enhances the economic outlook for 2026 and 2027.
However, as the United States is feeling the pressure from high valuations and growing political instability, analysts are looking towards Europe as a better bet for stock investors. Analysts point towards Europe offering a more stable outlook, with lower stock prices, clearer policy direction, and even potential interest rate cuts on the horizon. Investors seem to be shifting their focus, partly because the threat of US tariffs on Europe, especially on automobiles, feels less uncertain now that details are clearer. There is also less exposure to tech in Europe, which is seen as a good thing right now. Europe’s markets, with just 10% tech exposure in the Europe 600 compared to 30% in the broader market, look more balanced.
With solid earnings, rising share buybacks, and cheaper stock valuations, investors are turning to Europe. Experts suggest that European and UK markets now have their best shot in years at outperforming the US. With that in mind, let’s take a look at the best-performing stocks in Europe so far in 2025.
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Our Methodology
To compile our list of the top performing European stocks this year, used the Finviz screener, applying filters for the region and a market cap of over 10 billion to identify stable European companies. Next, we applied a performance filter and selected 11 European stocks with the highest YTD share price growth as of April 11. We have also mentioned the Q4 2024 hedge fund sentiment around the holdings for further insight.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Banco Santander, S.A. (NYSE:SAN)
Number of Hedge Fund Holders: 17
YTD Share Price Performance as of April 11: 44.17%
Banco Santander, S.A. (NYSE:SAN) ranks first on our list of the best performing stocks from Europe so far this year. It is a global Spanish bank offering retail and commercial banking, investment banking, wealth management, and digital payments. On March 10, Citi analysts maintained a Buy rating on SAN and lifted the price target from €6.6 to €7.2. According to the analysts, the bank’s earnings got a boost from solid performance in Spain, the US, Poland, and its Consumer & Corporate division. This offsets the softer results in Brazil and the UK. Analysts also now raised their earnings forecasts by 6% for 2025-2027.
In 2024, Banco Santander, S.A. (NYSE:SAN) recorded a €12.6 billion profit, up 14% year-over-year, driven by underlying revenue growth and better risk management. Customer funds grew faster than lending, and both net interest and fee income were up 8%, strengthened by higher customer activity. The bank’s capital position also improved, with a CET1 ratio of 12.8%. Throughout the year, SAN returned over €3 billion to shareholders through dividends and a €1.5 billion share buyback, up 17% compared to 2023. Santander added 8 million customers in 2024, bringing the total to 173 million, with a 9% rise in transactions per user compared to 2023.
According to Insider Monkey’s fourth quarter database, 17 hedge funds were bullish on Banco Santander, S.A. (NYSE:SAN), compared to 15 funds in the last quarter. Jim Simons’ Renaissance Technologies was the biggest stakeholder of the company, with 659,627 shares valued at $12.4 million.
Overall, SAN ranks 1st among the 11 Top Performing European Stocks So Far In 2025. While we acknowledge the potential of European stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SAN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
