1 Momentum Stock Worth Your Attention and 2 We Avoid

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. On that note, here is one stock with lasting competitive advantages and two that may correct.

Two Momentum Stocks to Sell:

Carrier Global (CARR)

One-Month Return: +5.2%

Founded by the inventor of air conditioning, Carrier Global (NYSE:CARR) manufactures heating, ventilation, air conditioning, and refrigeration products.

Why Do We Pass on CARR?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 2.8% annually
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $63.48 per share, Carrier Global trades at 23.1x forward P/E.

Verizon (VZ)

One-Month Return: +12.1%

Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE:VZ) is a telecom giant providing a range of communications and internet services.

Why Do We Steer Clear of VZ?

1. Annual sales growth of 1.5% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
2. Free cash flow margin is not anticipated to grow over the next year
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Verizon is trading at $50.01 per share, or 10.2x forward P/E.

One Momentum Stock to Buy:

Micron (MU)

One-Month Return: -5.7%

Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.

Why Is MU a Top Pick?

1. Impressive 61.7% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Market share is on track to rise over the next 12 months as its 114% projected revenue growth implies demand will accelerate from its two-year trend
3. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 29.2% annually

Micron’s stock price of $412.67 implies a valuation ratio of 10.2x forward P/E. Is now the time to initiate a position?

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 for this month — FREE.

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 Comfort Systems (+782% five-year return).