Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here are two stocks we think live up to the hype and one that may correct.
One Momentum Stock to Sell:
SoundHound AI (SOUN)
One-Month Return: +28.6%
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
Why Are We Cautious About SOUN?
- Gross margin of 40.7% reflects its high servicing costs
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Cash burn makes us question whether it can achieve sustainable long-term growth
SoundHound AI is trading at $8.79 per share, or 16.6x forward price-to-sales. If you’re considering SOUN for your portfolio, see our FREE research report to learn more.
Two Momentum Stocks to Watch:
Western Digital (WDC)
One-Month Return: +37.2%
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Does WDC Stand Out?
- Projected revenue growth of 39.7% for the next 12 months indicates demand will rise above its two-year trend
- Efficiency rose over the last five years as its Operating margin increased by 17.3 percentage points
- Free cash flow margin jumped by 17.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $480.55 per share, Western Digital trades at 30.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
FuelCell Energy (FCEL)
One-Month Return: +101%
Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.
Why Will FCEL Outperform?
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Earnings per share have massively outperformed its peers over the last two years, increasing by 31.9% annually
- Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day
FuelCell Energy’s stock price of $13.74 implies a valuation ratio of 3.1x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
