Growth stocks are very attractive for investors due to their upside potential, typically for a number of reasons, including recent positive earnings reports, acquisitions, partnerships, rating upgrades, and improved sales forecasts, among other catalysts. These are characteristic of high-momentum stocks.
Dealing with stocks experiencing greater than-expected growth and comparing said company to its peers is vital to determine if it is just one company that is affected or an industry-wide phenomenon, allowing for more educated investment decisions.
High-momentum stocks share a common factor: a recent surging share price showing no sign of stopping. Below are several stocks that have seen exponential growth recently and should be on every investor watchlist.
Super Micro Computer (SMCI)
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.
Over this last year, SMCI’s stock price has surged by over eightfold. This is due to several factors, including its solid balance sheet and the increased investor attention toward companies within the data center and cloud computing businesses.
On January 29, Super Micro Computer reported earnings for the second quarter of fiscal year 2024, stating that its revenue more than doubled and its net income rose by 68% compared to the previous year. Due to growing demand for its AI platform and other IT-related products, Super Micro improved its revenue guidance for fiscal year 2024.
SMCI has been one of the best-performing stocks in the market over the past year, and even with it more than doubling its share price in just the last month, it continues to climb. It is a very strong company that has reported impressive earnings and provides exposure to popular industries such as generative, cloud computing, and IT solutions—making it a no-brainer for a stock watchlist.
Powell Industries (POWL)
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, stating that total revenue increased by 53% from the previous year. Net income in Q1 FY2023 was approximately $1.2 million, and for Q1 2024, it was reported as $24.1 million. Powell cites that the increase in overall sales was due to improved sales within multiple industries, including oil and gas, utilities, and petrochemicals.
Powell saw a sharp increase in its share price by nearly 50% on the day its earnings were released due to blowing previous analysts’ expectations out of the water. Most notably, Earnings per share was antiquated to be reported at eighty-four cents per share, but it was one dollar and ninety-eight cents per share.
Ever since this stunning earnings report, its share price has continued to rise, and it will be interesting to see if Powell can keep growing at an exponential rate due to their strong financial position, a robust backlog that has nearly doubled from the prior year, and increased investor attention.
Toyota Motor (TM)
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 this past year, its stock price has increased by 57%, which has outpaced other popular auto manufacturers such as Tesla (NASDAQ:TSLA) and Ford Motor (NYSE:F), which have seen a slight decrease in their stock price within the same period.
On February 6, Toyota reported earnings for the third quarter of FY 2024, which stated that its earnings per share more than doubled and total revenue increased by 24% compared to the year before. And Toyota also raised its outlook for FY 2024 as well. Following this recent earnings report, Toyota has seen an increase in its share price of over 10%.
Toyota is on a solid growth trajectory due partly to its large market share of the auto manufacturing business, in which they are only behind Tesla in terms of market capitalization. Toyota has seen a strong bounce-back year following 2022, which saw a fairly substantial drop in its overall stock price. An improved financial position and increased financial outlook make Toyota a definite addition to an investment watchlist, and is 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.
