Why O'Reilly Automotive, Inc. (ORLY) Is Surging in 2025

We recently published an article titled Why These 15 Vehicles & Parts Stocks Are Surging In 2025. In this article, we are going to take a look at where O'Reilly Automotive, Inc. (NASDAQ:ORLY) stands against the other vehicles and parts stocks.

Certain automotive companies have held up surprisingly well in the current environment, and that’s especially true with companies that supply automotive parts. The high interest rate regime was supposed to crush automotive companies across the board, and early tariffs specifically targeted countries that produced the most automotive parts for the U.S.

Even then. These stocks have done well since high interest rates have made it difficult for low-income consumers to buy new cars. Instead, they have opted for repairing their existing vehicles, which has been a tailwind for automotive parts companies for the past two years. The average age of vehicles was already at a record 12.6 years in 2024, so this tailwind isn’t going away anytime soon.

Customers who have higher incomes have kept on buying new vehicles. It is mostly because of them that consumer spending has held up across the board. Here are the biggest winners from this trend.

Even during bear markets, there are pockets of the market that perform exceptionally well. For example, I identified 15 Financial Services Stocks that are up the Most in 2025 in another article.

Methodology

For this article, I screened the best-performing vehicles & parts stocks year-to-date.

I will also mention the number of hedge fund investors in these stocks. 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).

O'Reilly Automotive, Inc. (NASDAQ:ORLY)

Number of Hedge Fund Holders In Q4 2024: 63

O'Reilly Automotive, Inc. (NASDAQ:ORLY) is a leading retailer of automotive parts, tools, and supplies serving professional installers and do-it-yourself customers across the United States, Mexico, and Canada.

O'Reilly Automotive, Inc. (NASDAQ:ORLY)'s stock performance in 2025 has been influenced by its Q1 2025 financial results released in April. The company reported sales of $4.14 billion, which is a $161 million increase compared to the previous year. However, the company missed earnings per share expectations, which caused some volatility in the stock price immediately following the announcement.

Despite the EPS miss, O'Reilly Automotive, Inc. (NASDAQ:ORLY)'s strategic investments and expansion plans have bolstered investor confidence. The company opened 38 net new stores across the US and Mexico in Q1 2025. Capital expenditures for the quarter were $287 million, with projected total capital expenditure for 2025 between $1.2 billion and $1.3 billion. These investments signal O'Reilly's commitment to growth and market expansion.

The consensus price target of $1,414.56 implies 0.6% upside.

O'Reilly Automotive, Inc. (NASDAQ:ORLY) stock is up 18.60% year-to-date.

Overall ORLY ranks 13th on our list of vehicles and parts stocks that are surging in 2025. While we acknowledge the potential of ORLY as an investment, 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 ORLY 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.