Momentum investing is a well-established strategy that involves purchasing securities that have demonstrated strong recent performance and selling those that have underperformed. According to BlackRock, the effectiveness of this approach is often attributed to behavioral finance principles, which suggest that investor herding behavior and the tendency to chase performance contribute to such price trends. As more investors buy rising stocks, their prices are pushed even higher, creating a self-reinforcing cycle.
Additionally, some scholars argue that momentum premiums may serve as compensation for bearing specific types of risk, such as the risk of abrupt, short-term losses that many investors prefer to avoid. This is evident in historical momentum crashes, like those in 2001, 2009, and 2023. Despite these setbacks, long-term data indicated that investors are generally rewarded for maintaining exposure through periods of short-term volatility.
2024 has witnessed one of the most significant momentum rallies in the past three decades, with high momentum stocks outperforming their low momentum counterparts by 28% year-over-year, an event that statistically represents a two-standard-deviation occurrence. Momentum has outpaced other investment factors like quality and growth this year. These top-performing stocks come from a mix of industries, especially technology and financials, including many regional banks, and have returned 36% over the past year. While they are slightly more expensive than average stocks, they also have better profit margins and expected earnings growth.
However, history shows that when momentum stocks perform this well, they usually face a major drop within the next year. Typically, after a strong run like this, the gains continue for a few more months before reversing, often losing much of what they had gained.
With that in mind, let’s take a look at the 12 best stocks to buy that are also on Wall Street’s radar.
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Our Methodology
We analyzed the iShares MSCI USA Momentum Factor ETF and identified 12 stocks that received coverage from Wall Street analysts and mainstream media outlets recently. These momentum stocks were also favored by top hedge funds in the first quarter of 2025, as per Insider Monkey’s Q1 2025 database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 77
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the best stocks to buy. An SEC filing revealed that Palantir director, Eric H. Woersching, sold nearly $2.2 million worth of his shares on June 10. A total of 17,000 Class A common shares were sold on June 9, 2025, priced between $125.24 and $131.70 per share. The sale follows PLTR trading close to its 52-week high of $135.28, with a whopping 456.81% return over the last year.
The shares were sold under a pre-established Rule 10b5-1 trading plan, which was formalized on March 10, 2025. This plan enables insiders of publicly traded corporations to establish a trading plan for disposing of stocks they own, following insider trading laws.
Before these sales, Woersching secured 2,348 restricted shares on June 6, 2025, as a yearly award for his position on the board of directors. These restricted units were offered with no financial exchange, reflecting a contingent right to obtain shares according to a vesting schedule.
After these transactions, Eric Woersching owns 12,562 Palantir shares.
Palantir Technologies Inc. (NASDAQ:PLTR) develops software platforms that help governments and businesses make sense of complex data, supporting counterterrorism efforts, enterprise operations, and AI-driven decision-making.
11. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 87
The Coca-Cola Company (NYSE:KO) is one of the best stocks to buy. On June 11, Coca‑Cola announced a partnership with Universal Music Group to launch Real Thing Records (rtr), a music label to promote emerging global talent and foster greater engagement between artists and audiences. This collaboration represents Coca‑Cola’s longstanding relationship with music.
Adopting a genre-agnostic philosophy, rtr seeks to bring forward unique and authentic voices from around the world, positioning itself as a platform for the next generation of musical talent. The label’s debut signings include Max Allais, a French-New Zealand artist, and Aksomaniac, an Indian singer-songwriter and producer.
Joshua Burke, Coca‑Cola’s Global Head of Music & Culture, commented:
“The Coca‑Cola Company has a rich legacy, one of deep human connection and cultural resonance—breaking barriers and bringing people together across borders and generations. Real thing records is designed to unlock greater potential for artists, fans, and our brands—where creativity fuels growth, and the combined power of our network and key global music partners create value greater than the sum of its parts. It’s our intention to let artists shine and give them the flexibility to develop their identities with the support of global reach and expertise. It’s a long-term commitment to music—enabling us to reinvest in our programs, champion the next generation of talent, and stay rooted in what matters most: music and fandom.”
The Coca-Cola Company (NYSE:KO) is a global beverage corporation that produces and distributes carbonated soft drinks, bottled water, juices, teas, coffees, and plant-based beverages.
10. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 87
AT&T Inc. (NYSE:T) is one of the best stocks to buy. The company is currently implementing its multi-year strategic growth plan, looking to stand out in the connectivity sector by offering customers an integrated experience through a combination of fiber and 5G services under a single provider.
As part of this strategy, the company recently announced its intent to acquire the majority of Lumen’s Mass Markets fiber internet business. Expected to close in the first half of 2026, this acquisition is positioned to enhance US connectivity infrastructure, expand access to high-speed internet for millions of Americans, and generate middle-class employment opportunities.
This initiative supports the company’s ambition to become the leading American connectivity provider while driving long-term value for customers, shareholders, and the organization. With a goal of reaching approximately 60 million fiber locations by year-end 2030, AT&T continues to strengthen its leadership in fiber deployment.
For the second quarter of 2025, AT&T Inc. (NYSE:T) affirms its guidance for capital investment in the range of $4.5 to $5 billion and anticipates roughly $4 billion in free cash flow. The company maintains full-year 2025 financial and operational targets, as well as its long-term capital return strategy. Furthermore, AT&T is moving ahead with its $10 billion share repurchase program, targeting at least $3 billion in common stock buybacks by the end of 2025, with the remainder to be carried out in 2026.
AT&T Inc. (NYSE:T) delivers a wide range of telecommunications and technology services, including wireless, internet, and fiber solutions for both consumers and businesses.
