The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here is one stock with lasting competitive advantages and two not so much.
Two Momentum Stocks to Sell:
Qualcomm (QCOM)
One-Month Return: +41.7%
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ:QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
Why Does QCOM Fall Short?
- Projected sales decline of 8.8% for the next 12 months points to a tough demand environment ahead
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 7.2 percentage points
Qualcomm’s stock price of $250.85 implies a valuation ratio of 24.9x forward P/E. Read our free research report to see why you should think twice about including QCOM in your portfolio.
Dave & Buster’s (PLAY)
One-Month Return: +17.7%
Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.
Why Do We Think PLAY Will Underperform?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $13.69 per share, Dave & Buster’s trades at 8.3x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why PLAY doesn’t pass our bar.
One Momentum Stock to Buy:
Dell (DELL)
One-Month Return: +100%
Founded by Michael Dell in his University of Texas dorm room in 1984 with just $1,000, Dell Technologies (NYSE:DELL) provides hardware, software, and services that help organizations build their IT infrastructure, manage cloud environments, and enable digital transformation.
Why Should You Buy DELL?
- Annual revenue growth of 22.2% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 38.8% exceeded its revenue gains over the last two years
- Returns on capital are growing as management capitalizes on its market opportunities
Dell is trading at $420.63 per share, or 17.4x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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.
