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Comeback Heroes: Keep Your Eyes on These 3 High-Momentum Stocks

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The current market’s volatility is ripe for momentum investing, a strategy well-suited for those who easily navigate daily market fluctuations. Distinct from value investing, which focuses on acquiring undervalued assets, high-momentum investing is predicated on the belief that assets with strong recent performance will likely maintain their trajectory in the short term. Essentially, momentum investing seeks to profit from the stock market’s ‘hot streaks.’

The rapid evolution of artificial intelligence, biotechnology, renewable energy and other dynamic sectors makes the market ripe for momentum investors. These sectors are at the forefront of innovation and are driving forces in the stock market, offering numerous opportunities for astute investors.

But simply recognizing a thriving sector isn’t enough. The real test is identifying specific stocks within these sectors that demonstrate the strongest momentum. That’s our focus today — these three high-momentum stock picks are soaring, outshining their competitors and outperforming the broader market.

Palantir Technologies (PLTR)

A banner for Palantir (PLTR) hangs on the New York Stock Exchange.

Source: rblfmr / Shutterstock.com

If any high-momentum stock is the comeback story of the year, it’s Palantir Technologies (NYSE:PLTR). With its solid base of government contracts and growing corporate portfolio, the artificial intelligence and machine learning company finally broke free of its rangebound trading price after another solid earnings report sent shares soaring 47% since January.

While per-share pricing seems high today, the stock is stubbornly staying within the $20 – $25 range, perhaps as part of CEO Alex Karp’s fight against short sellers. But, stock price and valuation aside, it’s not hard to argue that Palantir’s long-term prospects remain bright even as it enjoys its current high-momentum stock status.

The company’s fifth consecutive profitable quarter saw Palantir post an 8 cents earnings per share while year’s end revenue growth climbed 14% for government contracts and — critically — 36% for its commercial segment. Much of the past bearish sentiment surrounding Palantir focused on its government contract reliance, but management’s penetration of the corporate sector is what now sets it apart from competitors and affirms its continued high-momentum stock potential.

GigaCloud Technology (GCT)

image of a cloud surrounded by various symbols related to internet connectivity and interaction

Source: Shutterstock

GigaCloud Technology (NASDAQ:GCT) is an archetypal high-momentum stock — in both directions. The stock soared 25% after a stellar earnings report earlier this week before falling back below pre-earnings pricing. Still, the company’s top-tier earnings position it as a high-momentum stock set to continue offering investors significant upside potential.

Mastering product and inventory management, sourcing and payment processing presents significant challenges for medium-sized businesses. GigaCloud delivers a comprehensive B2B eCommerce solution that encompasses an active vendor marketplace, shipment and freight management, warehouse storage, AI-powered fulfillment, and, crucially, secure cross-border payments.

Remarkably, GigaCloud’s price-to-earnings ratio stands at a modest 17x, which is significantly lower than the tech sector’s average ratio of 36x. This disparity becomes more pronounced upon examining GigaCloud’s earnings growth; the company has managed to double its earnings per share over the last five quarters, maintaining robust free cash flow per share, even as it trades at merely 2x times sales.

Rumble (RUM)

In this photo illustration the Rumble logo seen displayed on a smartphone. RUM stock

Source: rafapress / Shutterstock.com

Rumble (NASDAQ:RUM) is up 77% since January 1st — if that doesn’t meet the definition of a high-momentum stock, I don’t know what does! Shares are surging, in part, as the company makes a provisional offer to acquire TikTok but its status as a premier video-centric social media stock doesn’t hinge solely on this acquisition’s success. Demonstrating a keen sense of user preferences, Rumble struck a deal with Barstool Sports to provide “access to all Barstool Sports content…including live streams.”

Traditionally appealing to right-of-center users, Rumble’s attempt to purchase TikTok and its partnership with Barstool Sports reveal a strategic ambition to attract a more diverse audience, a strategy that appears to yield results. Rumble is set to unveil its latest earnings on Wednesday, Mar. 27th. Given the positive momentum surrounding the company, even slightly surpassing expectations could propel the stock to new heights, building on its current upward trajectory.

On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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