Have you ever watched a stock skyrocket and wondered, “How did I miss that?” I know I have. It’s like watching a racecar zoom past while you’re stuck in traffic, kicking yourself for not jumping on board. In 2025, one investment strategy is leaving others in the dust: momentum investing. This approach, which thrives on chasing stocks that are already climbing, is delivering jaw-dropping returns, and it’s not as risky as you might think. Let’s dive into why momentum is king this year, which stocks are leading the charge, and how you can spot the next big winner.
Why Momentum Investing Is Dominating 2025
Momentum investing is like catching a wave at just the right moment. It’s about identifying stocks that have been performing strongly—typically over the past 6 to 12 months—and betting they’ll keep climbing. Why does this work? It’s rooted in behavioral finance. Investors tend to pile into winners, creating a self-reinforcing cycle that pushes prices higher. Sounds simple, right? But there’s more to it than chasing hype.
In 2025, momentum is outperforming every other investment style. While the S&P 500 is just breaking even, momentum strategies are soaring, with some portfolios boasting gains of over 30% in 2024 alone. What’s wild is that this isn’t a one-year fluke—momentum has been a top performer in multiple years, including 2015, 2017, and 2020, with a 10-year annualized return of 12.7%. That’s the kind of track record that makes even the most skeptical investor take notice.
Momentum isn’t just about following the crowd—it’s about recognizing when the market is signaling real strength in a stock’s fundamentals.
– Financial analyst
But here’s the kicker: momentum isn’t just for high-flying tech stocks. Some of the biggest names in 2025’s momentum game are companies you’d typically think of as defensive, like Walmart or JPMorgan Chase. These aren’t your typical “hot stocks,” yet they’re showing up as heavyweights in momentum-focused ETFs. It’s a reminder that markets don’t always follow the script we expect.
The Psychology Behind Momentum
Why do stocks that are already doing well keep climbing? It’s not just random. Momentum taps into human behavior. When a stock’s price rises, it grabs attention. Investors start digging into the company, analysts issue bullish reports, and suddenly everyone wants a piece of the action. This creates a feedback loop where rising prices attract more buyers, pushing prices even higher.
Take Visa, for example. It’s been a powerhouse for years, but in 2025, it’s showing signs of another breakout. After bouncing off its 200-day moving average during a market dip in April, Visa’s stock is flirting with new highs. This isn’t just blind optimism—Visa’s fundamentals, like its dominance in global payments and steady revenue growth, are backing up the price action. When investors see this kind of strength, they don’t hesitate to jump in.
But momentum isn’t foolproof. It can be volatile. Sharp market shifts, like the one we saw in April 2025, can send momentum stocks tumbling before they recover. The key is knowing when to ride the wave and when to jump off.
Top Momentum Stocks to Watch in 2025
So, which stocks are stealing the show? Based on current trends, several names stand out for their blend of strong price performance and solid fundamentals. Here’s a closer look at a few that are catching investors’ eyes:
- Visa: A payments giant with a history of rewarding both short- and long-term investors. Its recent bounce off the 200-day moving average signals strong accumulation.
- Walmart: Not your typical momentum play, but its steady growth and resilience make it a standout in 2025.
- JPMorgan Chase: A banking titan showing surprising momentum, proving that “defensive” doesn’t mean “boring.”
- Broadcom: A tech leader riding the AI wave, with consistent price strength.
- Netflix: Streaming’s king continues to dominate, fueled by subscriber growth and innovative content.
These stocks aren’t just randomly spiking—they’re backed by fundamentals that justify their upward trajectory. For instance, Visa’s global reach and low debt make it a safe bet for growth, while Walmart’s e-commerce push has kept it relevant in a digital age. The lesson? Momentum isn’t always about chasing the shiny new thing; sometimes, it’s about recognizing strength in established players.
How to Spot the Next Breakout Stock
Want to find the next Visa before it breaks out? It’s not about guessing—it’s about following a systematic approach. Momentum investing is rules-based, relying on data like recent price performance and technical indicators like the Relative Strength Index (RSI). Here’s a quick guide to spotting potential winners:
- Check Recent Performance: Look for stocks with strong returns over the past 6-12 months. Consistent upward movement is a good sign.
- Watch Technical Indicators: A stock bouncing off its 200-day moving average, like Visa did in April, often signals accumulation by big investors.
- Assess Fundamentals: Make sure the company has solid earnings, low debt, or a competitive edge to sustain its momentum.
- Monitor Sector Trends: In 2025, industrials and tech are leading the pack, so keep an eye on those sectors.
Here’s a pro tip: don’t just chase the highest flyer. Stocks with extreme RSI readings can be overbought and due for a pullback. Instead, look for names with steady, sustainable gains. It’s like picking a marathon runner over a sprinter—they’re more likely to go the distance.
The Risks of Momentum Investing
I’ll be honest—momentum investing isn’t all sunshine and rainbows. It’s thrilling when it works, but it can burn you if you’re not careful. The biggest risk? Reversals. When market sentiment shifts, momentum stocks can crash hard. We saw this in April 2025, when momentum briefly became one of the worst-performing factors before rebounding.
Another challenge is timing. Jump in too late, and you’re buying at the peak. Exit too early, and you miss the big gains. That’s why discipline is key. Stick to a strategy, set stop-losses, and don’t let emotions drive your decisions.
Success in momentum investing comes from discipline, not luck. Know your entry and exit points, and stick to them.
– Investment strategist
Despite the risks, the rewards can be worth it. Momentum has outperformed the S&P 500 by 11% in 2025 so far, and over longer periods, it’s consistently beaten broader market indices. The trick is balancing risk and reward with a clear plan.
Sector Spotlight: Where Momentum Is Thriving
In 2025, momentum isn’t limited to one corner of the market. Early this year, utilities were the darlings of momentum investors, but now industrials and tech are taking over. Why the shift? It’s all about what’s driving the economy. Tech is riding the artificial intelligence boom, while industrials are benefiting from infrastructure spending.
| Sector | Why It’s Hot | Top Stock |
| Technology | AI and cloud computing growth | Broadcom |
| Industrials | Infrastructure and manufacturing | Caterpillar |
| Consumer Staples | Resilient demand | Walmart |
This diversity is what makes momentum investing so dynamic. It’s not about betting on one sector—it’s about following the price action wherever it leads. Right now, that’s pointing to a mix of tech giants and steady consumer names.
My Take: Why I Love Momentum (Sometimes)
I’ll let you in on a little secret: I wasn’t always sold on momentum investing. Early in my career, I leaned toward value stocks, thinking they were the “safer” bet. But after watching momentum strategies consistently outperform, I’ve come around. There’s something exhilarating about riding a stock’s upward wave, especially when the data backs it up.
That said, I think the real magic happens when you combine momentum with other factors, like quality or growth. A stock like Visa, with its rock-solid balance sheet and consistent price strength, is a perfect example. It’s not just about chasing price—it’s about finding companies that can keep delivering.
How to Build a Momentum Portfolio
Ready to give momentum a try? Building a portfolio around this strategy doesn’t have to be complicated, but it does require a plan. Here’s how I’d approach it:
- Start with a Momentum ETF: Funds like the iShares MSCI USA Momentum Factor ETF give you broad exposure to top performers.
- Add Individual Stocks: Pick 5-10 names from sectors like tech or industrials with strong price trends and fundamentals.
- Diversify: Don’t put all your eggs in one basket. Mix in some defensive names like Walmart to balance volatility.
- Monitor Regularly: Momentum shifts fast. Check your holdings weekly to stay on top of trends.
One final thought: momentum investing isn’t about being reckless. It’s about being disciplined and trusting the data. If you can do that, you might just find yourself riding the next big breakout.
What’s Next for Momentum in 2025?
As we move deeper into 2025, momentum shows no signs of slowing down. With economic uncertainty lingering, investors are flocking to stocks with proven strength. Names like Visa, Broadcom, and Walmart are likely to stay in the spotlight, but new contenders could emerge as sectors rotate. Keep an eye on technical indicators and sector trends to stay ahead of the curve.
In my experience, the best part of momentum investing is the thrill of discovery. There’s always a new stock, a new story, a new opportunity waiting to be uncovered. So, what’s your next move? Will you jump on the momentum train or stick to the sidelines? Whatever you choose, make sure it’s a decision you can stand behind.
