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Growth stocks appeal to investors due to their upward potential, often driven by recent positive earnings reports, acquisitions, partnerships, rating upgrades, and improved sales forecasts. These factors typify high-momentum stocks.
Analysing stocks experiencing higher-than-expected growth and comparing the company to its peers is crucial for making educated investment decisions, as it helps determine whether the trend is specific to a single company or representative of an industry-wide phenomenon.
High-momentum stocks are characterized by a recent surge in share price with no signs of slowing down. Here are several stocks that have witnessed exponential growth and should be on every investor’s radar.
Super Micro Computer (SMCI)
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Super Micro Computer (NASDAQ:SMCI) is a technology company that produces hardware and software products for server storage, such as motherboards, processors, networking solutions, and various chassis.
In the past year, SMCI’s stock price has surged by over eightfold, driven by factors including its solid balance sheet and increased investor attention towards data center and cloud computing companies.
On January 29, Super Micro Computer reported earnings for the second quarter of fiscal year 2024, revealing that its revenue more than doubled and its net income rose by 68% compared to the previous year. This growth was attributed to increasing demand for its AI platform and other IT-related products, leading the company to improve its revenue guidance for fiscal year 2024.
SMCI has been among the top-performing stocks in the market over the past year, with its share price more than doubling in the last month alone. Despite this, the stock continues to climb, offering exposure to popular industries such as cloud computing and IT solutions, making it a compelling addition to any stock watchlist.
Powell Industries (POWL)
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Powell Industries (NASDAQ:POWL) is an engineered systems manufacturer with products such as integrated power circuits, electrical housings, circuit breakers, and duct systems that serve utilities and energy businesses.
In late January, Powell Industries reported its first quarter earnings for FY 2024, indicating a 53% increase in total revenue from the previous year. Net income for Q1 FY2023 was approximately $1.2 million, which surged to $24.1 million in Q1 2024. The company attributed the increase in sales to improved performance across multiple industries, including oil and gas, utilities, and petrochemicals.
Powell witnessed a substantial surge in its share price, soaring by nearly 50% on the day of its earnings release, surpassing analysts’ expectations. Of particular note, the reported earnings per share of eighty-four cents was nearly double the anticipated amount at one dollar and ninety-eight cents per share.
Following this impressive earnings report, the stock price continued to rise, and whether Powell can sustain this exponential growth remains to be seen, given its strong financial position, robust backlog that has nearly doubled from the prior year, and increased investor attention.
Toyota Motor (TM)
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Toyota Motor (NYSE:TM) manufactures vehicles such as minivans, sedans, pickup trucks, SUVs, buses, and luxury cars under its brand Lexus. It also operates a financial services segment that provides leasing.
Over the past year, its stock price has surged by 57%, outperforming other popular auto manufacturers such as Tesla (NASDAQ:TSLA) and Ford Motor (NYSE:F), which saw a slight decline in their stock price during the same period.
On February 6, Toyota reported earnings for the third quarter of FY 2024, revealing that its earnings per share more than doubled and total revenue increased by 24% compared to the year before. Additionally, Toyota raised its outlook for FY 2024. Subsequently, the share price increased by over 10% following this latest earnings report.
Toyota is on a solid growth trajectory, partly due to its significant market share in the auto manufacturing industry, trailing only Tesla in terms of market capitalization. After a challenging 2022, which saw a notable drop in its stock price, Toyota has rebounded strongly, driven by improved financials and an enhanced financial outlook, making it a compelling addition to an investment watchlist as one of those high-momentum stocks.
As of this writing, Noah Bolton held a LONG position in TM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Noah has about a year of freelance writing experience. He’s worked with Investopedia dealing with topics such as the stock market and financial news.
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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.
