NVIDIA & 2 Other S&P 500 Momentum Stocks to Buy in 2025
After back-to-back standout years, the S&P 500 is well-poised to gain further in 2025, banking on Donald Trump’s pro-growth initiatives, the Federal Reserve’s moderate interest rate policies and a resilient U.S. economy.
In 2024, the S&P 500 jumped more than 20% for the second consecutive year. With further gains anticipated, investors should seize the bullish trend by investing in strong S&P 500 momentum stocks. Investors should apply the investment strategy of Richard Driehaus, better known as the “buy high and sell higher” theory.
To that end, stocks like NVIDIA Corporation NVDA, Brown & Brown, Inc. BRO and Chipotle Mexican Grill, Inc. CMG have been selected as the momentum picks for 2025 using the Driehaus strategy.
Regarding the strategy, Driehaus once said: “I would much rather invest in a stock that’s increasing in price and take the risk that it may begin to decline than invest in a stock that’s already in decline and try to guess when it will turn around.” In line with this insight, the American Association of Individual Investors (“AAII”) considered the percentage 50-day moving average as one of the key criteria before creating a portfolio following Driehaus’ philosophy.
It is calculated by dividing the numerator (month-end price minus 50-day moving average of month-end price) by the 50-day moving average of the month-end price. Another momentum indicator — positive relative strength — has also been included in this strategy. A positive percentage 50-day moving average indicates that the stock is trading at a price higher than its 50-day moving average level, indicating an uptrend.
Moreover, AAII found that Driehaus primarily focuses on strong earnings growth rates and impressive earnings projections to pick potential outperformers. This strategy, which was designed to provide better returns over the long term, also prioritizes companies with a strong history of beating estimates.
To make the strategy more profitable, we have considered only those stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, combined with a Zacks Rank #1 or 2, offer the best upside potential.
• Zacks Rank less than or equal to #2
Whether the market is good or bad, stocks with a Zacks Rank #1 or 2 have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
