In this piece, we will take a look at the 12 best momentum stocks to buy today. If you want to skip our analysis of the stock market and the latest news, and want to take a look at the top five stocks in this list, then head on over to 5 Best Momentum Stocks to Buy Today.

Investors are talking about the latest jobs report released on July 7. According to the report, US employers added 209,000 jobs in June, below Wall Street expectations. The Federal Reserve is actively watching the labor market since employment data is key when it comes to deciding the future trajectory of rate hikes.

The ADP’s National Employment Report that was released in the first week of July showed that the private sector had added 497,000 jobs in June. This was more than two times the economists’ predictions of 228,000 jobs and a significantly higher jump over May’s figure of 267,000 new hires. Within this dataset, mid-sized businesses (those with up to 250 employees) added the most jobs, with the largest firms actually seeing a decline in employment. Industry wise, it was the leisure and hospitality industry that added the most jobs, with firms in the financial and manufacturing industries seeing a decrease in employment.

However, for the stock market bulls, pay gains for both those staying in their jobs and for those switching their roles slowed down, indicating that firms are feeling the heat in a high interest rate environment. The contrast between the private sector adding more jobs and a hint of a potential slowdown in the labor market continued in the Labor Department’s unemployment claims data for the week ending on July 1st. This data showed that the initial claims jumped to 248,000 – increasing by 12,000 over the previous week’s data. The unemployment rate also stood unchanged at 1.2%. Data for the claims ended up beating economist estimates of 245,000 – showing that they were being conservative in estimating a slowing market.

Getting right back to work after the holiday, the Labor Department dumped another set of data on investors. This data came in the form of the Job Openings and Labor Turnover Survey (JOLTS) report. Covering the state of the labor market for May, this data showed that on the last business day of May, job openings had dropped to 9.8 million with the number of people quitting their jobs also increasing but layoffs remaining relatively the same. Crucially, though, the job openings rate also declined in May, sitting at 5.9% after its 6.2% reading in April. Cumulatively, the data hints at the fact that perhaps the labor market has peaked and is finding it difficult to battle the Fed’s ten interest rate hikes so far.

Amidst this backdrop, one way to play the stock market is by focusing on the technicals. These involve studying different stock trends, such as share price averages, the number of people trading the shares, and the extent of market interest in the shares. Cumulatively, these enable one to paint a bigger picture of a stock to see whether any potential negative or positive interest in it will carry into the coming months and present an opportunity for making a profit.

As to what lies in the future for the stock market, particularly in the aftermath of the strong gains made during H1 2023, here’s what Sam Stovall, the chief investment strategist of CFRA Research has on his mind:

Well I think that we’re likely to see a positive second half. I mean traditionally a strong first half ends up serving as a running start to the second half. Typically we’re up about 4.5% in the second half since world war two, rising about 70% of the time, but if you have the first half that’s up more than 10% and this one was up, higher than 15%, then you end up with about an 8% gain on average, rising in price about 82% of the time. So, basically what it says is that those portfolio managers that were underperforming the market, put the pedal to the metal and tried to catch up.

With these details in mind, let’s take a look at some momentum stocks that hedge funds are buying, with some top picks being Meta Platforms, Inc. (NASDAQ:META), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA).

Our Methodology

To compile our list of the best momentum stocks to buy, we first took the top 40 companies in the iShares MSCI USA Momentum Factor ETF and ranked them by hedge fund sentiment during Q1 2023. Out of these the top twelve stocks in terms of hedge fund sentiment were picked for our list of the best momentum stocks to buy.

Best Momentum Stocks to Buy Today

12. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Funds Investors In Q1 2023: 72

Broadcom Inc. (NASDAQ:AVGO) designs and sells semiconductor products that are used in a variety of gadgets and computers for connectivity. It is one of the chip firms that are expected to benefit from the growth in artificial intelligence demand since they are used in large data centers.

As of this year’s first quarter, 72 of the 943 hedge funds part of Insider Monkey’s database had bought a stake in Broadcom Inc. (NASDAQ:AVGO). Out of these, the firm’s largest shareholder is Ken Fisher’s Fisher Asset Management with a $766 million stake.

Broadcom Inc. (NASDAQ:AVGO) joins Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), and NVIDIA Corporation (NASDAQ:NVDA) in our list of top momentum stocks.

11. The TJX Companies, Inc. (NYSE:TJX)

Number of Hedge Funds Investors In Q1 2023: 73

The TJX Companies, Inc. (NYSE:TJX) is an American retailer with a global presence. Its shares have an average rating of Strong Buy, with 23 out of 27 analysts rating them Buy or higher.

Insider Monkey’s March quarter of 2023 survey of 943 hedge funds revealed that 73 had owned the firm’s shares. Panayotis Takis Sparaggis’s Alkeon Capital Management is The TJX Companies, Inc. (NYSE:TJX)’s biggest investor, owning 5.2 million shares that are worth $413 million.

10. Analog Devices, Inc. (NASDAQ:ADI)

Number of Hedge Funds Investors In Q1 2023: 73

Analog Devices, Inc. (NASDAQ:ADI) is a semiconductor firm that designs and sells data conversion chips. The firm was praised by JPMorgan in June 2023, when analyst Harlan Sur stated that it will benefit from the growth in electric vehicles.

By the end of 2023’s first quarter, 73 of the 943 hedge funds profiled by Insider Monkey had invested in Analog Devices, Inc. (NASDAQ:ADI). Out of these, the largest shareholder is David Blood and Al Gore’s Generation Investment Management through owning a $1 billion stake.

9. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Funds Investors In Q1 2023: 73

Exxon Mobil Corporation (NYSE:XOM) is one of the biggest oil companies in the world, operating from the field to the pump. It has an average share price target of $125, a sizeable upside from the current share price.

73 of the 943 hedge funds part of Insider Monkey’s database had bought the firm’s shares as of Q1 2023. Exxon Mobil Corporation (NYSE:XOM)’s biggest investor in our database is Rajiv Jain’s GQG Partners with an investment of $2.1 billion.

8. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Funds Investors In Q1 2023: 75

Merck & Co., Inc. (NYSE:MRK) is a pharmaceutical giant that has been in business for more than a century. The firm’s coronavirus treatment plans faced a setback in June when it withdrew its approval application in Europe.

Insider Monkey dug through 943 hedge funds for their first quarter of 2023 investments to discover that 75 had invested in Merck & Co., Inc. (NYSE:MRK). Ken Fisher’s Fisher Asset Management is the biggest shareholder, owning a $1.3 billion stake.

7. Booking Holdings Inc. (NASDAQ:BKNG)

Number of Hedge Funds Investors In Q1 2023: 77

Booking Holdings Inc. (NASDAQ:BKNG) is a travel services firm, with its online platform allowing people to plan their trips. It is trying to currently expand its services portfolio in Europe by acquiring a Swedish flights selling platform.

Insider Monkey’s first quarter of 2023 survey covering 943 hedge funds outlined that 77 had bought the firm’s shares. Out of these, Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the largest investor through owning $923 million worth of shares.

6. NIKE, Inc. (NYSE:NKE)

Number of Hedge Funds Investors In Q1 2023: 81

NIKE, Inc. (NYSE:NKE) is a household name and one of the biggest sports equipment and apparel firms in the world. Its shares have an average price target of $117.89, higher than the current price of $105.

81 of the 943 hedge funds polled by Insider Monkey had bought a stake in NIKE, Inc. (NYSE:NKE) as of Q1 2023. The firm’s largest hedge fund shareholder in our database is Ken Fisher’s Fisher Asset Management, courtesy of its 9.1 million shares that are worth $1.1 billion.

Meta Platforms, Inc. (NASDAQ:META), NIKE, Inc. (NYSE:NKE), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA) are some top momentum stocks that hedge funds are buying.

Click to continue reading and see 5 Best Momentum Stocks to Buy Today.

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Disclosure: None. 12 Best Momentum Stocks to Buy Today is originally published on Insider Monkey.