What if someone asks – what’s better than a stock going up? Answer should be – an undervalued stock going up. That’s the essence of this strategy—combining value with momentum. It’s about finding those underappreciated names that are catching investors’ attention and are rising. For investors, this can offer the best of both worlds: upside potential at a reasonable price.
Momentum investing focuses on stocks that have shown recent price strength, under the assumption that this strength will continue in the short term. Various academic studies back this premise, showing that securities which outperform over the past 3 to 12 months often continue to outperform in the following months.
Charles Schwab CEO Emphasizes Momentum as Key Indicator
In a recent discussion on Yahoo Finance, Charles Schwab CEO Rick Wurster advised investors to focus on momentum as a simple yet effective way to assess stock performance.
Wurster suggested that one of the easiest technical indicators to watch is whether a stock is moving upward and staying above its long-term moving averages. He explained that such upward momentum typically signals underlying fundamental strength within the company.
“If a stock is going up and to the right, something good is fundamentally happening at the company,” Wurster noted, encouraging investors to keep their strategy straightforward by relying on momentum as a proxy for financial and operational health.
But Risks Remain as Unknowns Still at Play
That said, momentum investing isn’t risk-free, as investors also assume significant risk when the market corrects. Komal Sri Kumar, President of Sri-Kumar Global Strategies, cautioned investors during a June 26, 2025 appearance on CNBC that the current momentum driving U.S. equity markets may not be sustainable. Despite the market reaching record highs, he says that the market may see a 10% correction before year-end. To justify his view, he cited multiple macroeconomic and geopolitical risks that could disrupt the rally.
He emphasized that while market sentiment appears strong, it’s being propped up by a fragile balance of unresolved factors. These issues include tensions in the Middle East, uncertainty surrounding U.S. tariff policy, and concerns over the expanding fiscal deficit. While there is temporary calm in some of these areas, he warned that momentum-driven gains could reverse sharply if conditions worsen.
With those insights, let’s look at the 20 undervalued momentum stocks that are taking off.
Our Methodology
For shortlisting the 20 undervalued momentum stocks that are taking off, we began by using online stock screeners to find companies with a minimum 3-month share price return of 20%, a sign of strong recent momentum. From this initial pool, we filtered for stocks with a forward price-to-earnings (P/E) ratio of 15 or less to focus on names that still appear undervalued relative to earnings expectations. We then identified the top 10 stocks with the highest hedge fund ownership from this refined list by leveraging data from Insider Monkey’s Q1 2025 hedge fund database. Finally, we ranked these stocks in ascending order based on the number of hedge funds holding positions in them.
Note: All pricing and analyst rating data are as of market close on June 26, 2025.
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).
20 Undervalued Momentum Stocks That Are Taking Off
20. CleanSpark Inc. (NASDAQ:CLSK)
3-Month Price Change: 23.8%
Forward PE: 11.0
Number of Hedge Fund Holders: 23
CleanSpark Inc. (NASDAQ:CLSK) is one of the 20 undervalued momentum stocks that are taking off. In an industry where scale and speed are everything, CleanSpark has just hit a major milestone that investors shouldn’t overlook.
On Tuesday, June 24, CleanSpark announced that it had reached a total operating capacity of 50 exahashes per second (EH/s), meaning the company has achieved its mid-year 2025 target on schedule. The update caught the attention of H.C. Wainwright analyst Mike Colonnese who reiterated his bullish view on CleanSpark following the company’s update.
To benchmark this performance versus the last year, we note that throughout December 2024, the Company’s average hashrate was 35.52 EH/s, and it reported a hashrate of 39.1 EH/s at the end of the last year. Although, in comparison, the top player, MARA Holdings Inc. (NASDAQ:MARA), reported a hashrate of 58.3 EH/s at the end of May and held 49,179 bitcoin (BTC).
According to Colonnese, this milestone makes CleanSpark only the second public Bitcoin miner in their coverage to achieve this scale. The analyst emphasized that CleanSpark remains their top pick in the crypto mining sector.
He pointed to the company’s 145% year-over-year growth in hash rate since June 2024, which he attributes to a blend of solid organic expansion, targeted acquisitions, and disciplined capital allocation. In his view, as the company continues to expand its infrastructure and focus on capital efficiency, it appears well-positioned to build on its current momentum.
CleanSpark (NASDAQ:CLSK), is a pure-play Bitcoin miner with a portfolio of mining facilities across the United States.
19. Sonic Automotive Inc. (NYSE:SAH)
3-Month Price Change: 27.2%
Forward PE: 12.7
Number of Hedge Fund Holders: 26
Sonic Automotive Inc. (NYSE:SAH) is one of the 20 undervalued momentum stocks that are taking off. On June 16, BofA updated its outlook on Sonic Automotive, raising the stock’s price target from $80 to $94 while maintaining its Buy rating. The adjustment reflects a broader revision across its auto sector coverage, prompted by updated estimates and a forward shift in its valuation model to calendar year 2026.
According to the analyst, the slight downward revision in U.S. auto sales and production estimates for 2025 and 2026 accounts for potential headwinds, including tariff-related disruptions, supply chain risks around rare earth materials, and ongoing macroeconomic uncertainty. BofA now projects U.S. industry sales at 16.25 million units in 2025 and 16.9 million in 2026, with North American production expected at 15.75 million and 16.4 million units, respectively.
Despite these near-term challenges, the analyst believes most of the pressures should ease by late 2025 or early 2026. The revised target on Sonic Automotive reflects this measured optimism, incorporating the expected normalization of conditions over the medium term.
Sonic Automotive Inc. (NYSE:SAH) is one of the largest automotive retailers in the United States. Its services include the sale of both new and used cars and light trucks, sales of replacement parts, vehicle maintenance, warranty services, paint and repair services, and other aftermarket services.
18. AngloGold Ashanti plc (NYSE:AU)
3-Month Price Change: 30.2%
Forward PE: 11.5
Number of Hedge Fund Holders: 28
AngloGold Ashanti plc (NYSE:AU) is one of the 20 undervalued momentum stocks that are taking off. On June 12, Roth Capital analyst Joe Reagor recently initiated coverage on AngloGold Ashanti with a Buy rating and a $52 price target, citing a clear and disciplined growth strategy. According to the analyst, the company is taking prudent steps to improve the quality of its portfolio which should generate long-term value for investors.
Reagor pointed to AngloGold’s focus on building a stronger asset base by concentrating on Tier 1 operations. This approach was reflected in the November 2024 acquisition of Centamin PLC and its flagship Sukari mine. This asset aligns with AngloGold’s criteria for scale, cost efficiency, and long-life production. At the same time, the company has been shedding non-core assets, including its projects in Côte d’Ivoire and the Brazilian Mineracao Serra Grande mine, which Reagor noted did not meet management’s standards for capital allocation.
He also sees further potential for M&A activity, as AngloGold continues to evaluate opportunities that match its strategic objectives. In addition, Reagor emphasized the development of the company’s Nevada projects as a key driver of future growth, with meaningful production increases expected from these assets in the coming years.
In a further positive development, AngloGold Ashanti is expected to join the Russell 3000 and other Russell equity indexes on June 27, 2025. Commenting on the addition to the benchmarks, the company’s CEO Alberto Calderon stated:
“This is an important milestone for AngloGold Ashanti. Our inclusion in this important family of US equity market indexes will help further increase liquidity and unlock long-term value for our shareholders.”
AngloGold Ashanti plc (NYSE:AU) is an independent, global gold mining company with a diversified portfolio of operations, projects, and exploration activities spanning ten countries.
17. Smithfield Foods Inc. (NASDAQ:SFD)
3-Month Price Change: 21.5%
Forward PE: 10.3
Number of Hedge Fund Holders: 29
Smithfield Foods Inc. (NASDAQ:SFD) is one of the 20 undervalued momentum stocks that are taking off.
Smithfield Foods presents a compelling investment opportunity, backed by strong fundamentals, resilient profitability, and a clear path for growth. With $14.1 billion in FY 2024 sales and $1.4 billion in adjusted EBITDA, Smithfield has established itself as a leading U.S. food company, anchored by its high-margin packaged meats segment.
Packaged meats now account for 59% of Smithfield’s total revenue, with $8.3 billion in sales and a 13.6% adjusted operating margin. The company has outperformed its peers in profitability, supported by its brand strength, product diversification, and broad reach in retail and foodservice. Smithfield holds the No. 2 branded market share across 25 key meat categories and reaches 93% of all commodity volume (ACV) across retailers. It also serves all of the top 10 grocery/club stores and 70% of leading foodservice chains.
On the operational side, Smithfield’s vertically integrated model enables it to ensure supply chain stability and cost control. The company is also optimizing its hog production operations, reducing commodity exposure while securing raw material needs for its packaged meats and fresh pork segments.
Smithfield’s 2025 guidance calls for continued profit growth and investments in automation, innovation, and premium offerings. With a strong balance sheet, including $3.2 billion in liquidity and a low 0.7x net debt-to-EBITDA ratio as of March 2025, the company is well-positioned to invest in strategic M&A and deliver shareholder returns, including a planned annual dividend of $1.00 per share.
Smithfield Foods Inc. (NASDAQ:SFD) is an American food company and an industry leader in value-added packaged meats and fresh pork.
16. O-I Glass Inc. (NYSE:OI)
3-Month Price Change: 30.9%
Forward PE: 11.3
Number of Hedge Fund Holders: 29
O-I Glass Inc. (NYSE:OI) is one of the 20 undervalued momentum stocks that are taking off. RBC Capital’s Arun Vishwanathan recently reaffirmed an Outperform rating on O-I Glass (NYSE: OI), maintaining a price target of $16. His positive stance comes after investor meetings with CFO John Haudrich and IR head Chris Manuel in Boston.
The firm continues to report good progress under its “Fit-to-Win” transformation strategy (initiated in 2024), which remains in its early phase. This multi-year plan (spanning three to five years) is aimed at improving operational performance and positioning the business for more consistent earnings growth. According to Vishwanathan, the initial results are encouraging and could set the stage for performance at the higher end of management’s long-term guidance.
While the broader demand backdrop still shows some volatility, largely due to inflation-driven consumer behavior, the analyst noted that O-I has so far delivered solid execution. Specifically, volume trends and price/cost performance are tracking in line or slightly ahead of expectations.
Looking ahead, RBC sees potential for significant upside if the company achieves its goals, as the successful execution of the turnaround could help O-I generate stronger free cash flow and reduce its leverage. Over time, this could support valuation multiple expansion and strengthen the company’s investment case.
O-I Glass Inc. (NYSE: OI) is one of the world’s leading manufacturers of glass containers, with 69 glass manufacturing plants located in 19 countries.
15. Concentrix Corporation (NASDAQ:CNXC)
3-Month Price Change: 22.0%
Forward PE: 4.6
Number of Hedge Fund Holders: 33
Concentrix Corporation (NASDAQ:CNXC) is one of the 20 undervalued momentum stocks that are taking off. Following its fiscal Q2 earnings, Concentrix continues to receive cautious commentary from Bank of America analyst Ruplu Bhattacharya, who reiterated a Hold rating, citing a mix of near-term pressures and longer-term uncertainties. On June 27, the analyst adjusted his price target on the stock to $61 from $65, reflecting a slightly reduced 2026 EPS estimate of $12.16 (down from $12.32), while keeping the valuation multiple unchanged.
The recent revenue beat in Q2 was a positive surprise; however, the company fell short of its operating margin guidance. The analyst attributed this to costs led by Concentrix’s decision to retain workforce for the paused client programs amid tariff-related uncertainty, as well as upfront investments aimed at supporting a stronger second half. These choices resulted in negative operating leverage during the quarter.
Earlier in his June update, Bhattacharya had also highlighted the muted short-term impact of generative AI on Concentrix’s revenue. While the company is actively investing in AI capabilities, deployment across its client base remains in early stages. As a result, any meaningful revenue uplift from AI is likely a longer-term story.
Bhattacharya had also noted that while verticals like travel and financial services are showing resilience, others, including technology and healthcare, are seeing weaker demand. He acknowledged that Concentrix’s valuation looked inexpensive and flagged potential for a short squeeze given elevated short interest. Still, overall, the macro backdrop and sector-specific headwinds justify a Hold rating.
Concentrix Corporation (NASDAQ:CNXC) specializes in designing, building, and managing end-to-end Customer Experience (CX) and digital operations solutions.
14. Urban Outfitters Inc. (NASDAQ:URBN)
3-Month Price Change: 32.9%
Forward PE: 14.1
Number of Hedge Fund Holders: 35
Urban Outfitters Inc. (NASDAQ:URBN) is one of the 20 undervalued momentum stocks that are taking off. On June 17, Citi analyst Paul Lejuez highlighted Nuuly, Urban Outfitters’ (URBN) apparel rental business, as a key driver of the company’s future growth. In a note following an investor event held last week, Lejuez reiterated his Buy rating on URBN with a $75 price target, emphasizing the growing importance of Nuuly in the broader business strategy.
Nuuly, a part of the company’s subscription segment, is primarily a monthly women’s apparel subscription rental service and offers a wide selection of the Company’s brands, third-party brands and one-of-a-kind vintage pieces via a custom-built, digital platform. Subscribers select their products each month, wear them as often as they like, and then swap into new products the following month.
While rental models in apparel have typically been subject to skepticism from investors, Lejuez suggests that Urban Outfitters may have found a way to make the economics work. He believes Nuuly has emerged as the clear leader in the rental segment and is already showing signs of profitability, which appears no mean feat in this space.
Lejuez also argues that the market undervalues Nuuly’s growth potential as he estimates that it could drive up to 40% of Urban Outfitters’ total revenue growth over the next five years. His analysis suggests that this upside is not fully reflected in the current share price.
As such, Lejuez believes that Nuuly deserves more investor attention in the future, as it may play a much larger role in shaping Urban Outfitters’ growth trajectory than currently assumed.
Urban Outfitters Inc. (NASDAQ:URBN) is a lifestyle products and services company that operates a portfolio of global consumer brands, primarily including Anthropologie, Free People, FP Movement, Urban Outfitters, and Nuuly.
13. Amentum Holdings Inc. (NYSE:AMTM)
3-Month Price Change: 28.3%
Forward PE: 10.8
Number of Hedge Fund Holders: 37
Amentum Holdings Inc. (NYSE:AMTM) is one of the 20 undervalued momentum stocks that are taking off. BTIG analyst Andre Madrid reiterated a Buy rating on Amentum Holdings Inc. on June 3, maintaining a $30 price target. His view reflects several developments that could support both operational performance and investor sentiment.
First among those developments is the complete exit of Jacobs Solutions from Amentum’s ownership. With Jacobs distributing its remaining 7.3 million shares, Amentum’s public float has expanded, improving the stock’s liquidity. As is typical for increased float, Madrid sees this as a positive shift that may broaden institutional interest and trading activity.
The analyst also highlighted that the company has received a potential $4 billion contract with the U.S. Space Force. If the company successfully completes this project, it has the potential to further establish the company’s reputation in managing larger, high-value government projects.
Madrid also highlighted recent internal restructuring efforts. Recently, Amentum sold its Rapid Solutions unit and the proceeds from this divestiture are expected to help reduce debt, which would further bolster the balance sheet. It also revised its accounting methods for joint ventures, which should help the company in simplifying its structure and improve financial controls.
The analyst also highlights that Amentum’s valuation remains compelling, trading at around 10 times EV/EBITDA. In his view, this supports a bullish outlook on the stock.
Amentum was formed on September 27, 2024, through the merger of the legacy Amentum business with a spin-off of Jacobs Solutions Inc.’s Critical Mission Solutions business, along with parts of the Jacobs Divergent Solutions business. The company delivers advanced engineering and technology solutions to a wide range of U.S. and allied government agencies, as well as commercial enterprises.
12. Perimeter Solutions Inc. (NYSE:PRM)
3-Month Price Change: 53.0%
Forward PE: 14.1
Number of Hedge Fund Holders: 37
Perimeter Solutions Inc. (NYSE:PRM) is one of the 20 undervalued momentum stocks that are taking off. In a recent note, Morgan Stanley analyst Daniel Kutz reiterated his Buy rating on Perimeter Solutions (PRM), with a price target of $17. His positive stance on the stock is grounded in both the strength of the company’s core business and its disciplined M&A strategy.
A key focus is Perimeter’s U.S. Retardants segment, which Kutz expects to draw increased investor interest as wildfire season approaches. Unlike many cyclical businesses, this unit is relatively less affected by broader economic fluctuations, offering a degree of earnings stability even if macro conditions soften. This makes the business particularly valuable in a more uncertain economic environment.
Kutz also highlights that Perimeter has been targeting assets with recurring revenues, strong cash flow generation, and long-term growth potential, which are key qualities that support sustainable performance. The analyst also cited the recent bolt-on acquisition in the Printed Circuit Board product line, which he believed reinforces confidence in the company’s ability to build value through mergers and acquisitions.
With solid cash reserves, Perimeter appears well-equipped to continue adding to its portfolio in a strategic and accretive way. According to Kutz, all the factors outlined above combine to support his bullish view on the stock.
Perimeter Solutions Inc. (NYSE:PRM) provides solutions for the Fire Safety and Specialty Products industries.
11. Coeur Mining Inc. (NYSE:CDE)
3-Month Price Change: 42.5%
Forward PE: 13.0
Number of Hedge Fund Holders: 38
Coeur Mining Inc. (NYSE:CDE) is one of the 20 undervalued momentum stocks that are taking off. In mid-June, the company’s management presented its investment case at the RBC Capital Markets Global Mining & Materials Conference. The company offers a compelling investment opportunity as a multi-asset precious metals producer poised for a step-change in performance.
Coeur’s flagship silver asset and the largest primary silver operation in the U.S., the Rochester mine, is entering its first full year since completing a major expansion. Output is expected to rise meaningfully, while unit costs are projected to fall sharply, setting the stage for improved operating margins.
The recent acquisition of Las Chispas has also strengthened Coeur’s positioning in the silver industry. As per the analyst, this mine delivers high-grade ore at low cash costs, thus reinforcing the company’s margins and expanding its production base.
The company’s aggressive exploration strategy is also expected to be a key catalyst for growth. The company has earmarked $77–$93 million for exploration in 2025, targeting growth at core sites like Palmarejo, Kensington, and Silvertip. Over the past five years, that focus has paid off—Coeur has expanded its proven and probable reserves by 66%, adding long-term value to its portfolio.
Financially, the company is in a strengthening position. With leverage declining to 0.9x net debt/EBITDA, improved cash flow, and a balanced capital plan, Coeur is increasingly well-positioned to deliver good shareholder returns. Adjusted EBITDA is forecasted to more than double in 2025, supported by rising gold and silver production from a well-diversified portfolio.
Recent analyst opinions about the stock have been largely positive, with the stock currently holding a consensus Buy rating. On June 4, RBC Capital analyst Michael Siperco reaffirmed a Buy rating, raising his price target to $11 from $10. Before that, in early May, Cantor Fitzgerald analyst Mike Kozak upgraded the stock to Overweight from Neutral, with a steady $10 price target.
10. CF Industries Holdings Inc. (NYSE:CF)
3-Month Price Change: 20.9%
Forward PE: 13.6
Number of Hedge Fund Holders: 42
CF Industries Holdings Inc. (NYSE:CF) is one of the 20 undervalued momentum stocks that are taking off. In a recent update, Morgan Stanley analyst Vincent Andrews reiterated a Hold rating on the company, maintaining his $80 price target.
One of the key points in the report is CF’s outlook on global ammonia markets. The company expects a tightening supply-demand environment through 2029, which could be favorable for pricing. However, Andrews points out that this potential upside might be partially offset by the shutdown of less efficient European plants, which could help ease the supply pressure.
CF also stands to benefit from its growing focus on low-carbon ammonia. The company believes that it can charge a premium in this area, which could help it to grow EBITDA over time.
At the same time, Andrews notes that CF’s mid-cycle EBITDA guidance and ongoing investments, particularly the significant capital commitments for the Blue Point project, suggest a more cautious near-term outlook. While a partnership with Linde helps the company lower its capital expenditure requirements, the project’s scale and its financial impact remain key variables for investors to consider.
CF Industries Holdings Inc. (NYSE:CF) engages in the manufacture and sale of hydrogen and nitrogen products, primarily ammonia and ammonia-based fertilizers, for energy, fertilizer, emissions abatement, and other industrial activities.
9. Mr. Cooper Group Inc. (NASDAQ:COOP)
3-Month Price Change: 40.8%
Forward PE: 10.9
Number of Hedge Fund Holders: 43
Mr. Cooper Group Inc. (NASDAQ:COOP) is one of the 20 undervalued momentum stocks that are taking off. On June 9, Mr. Cooper Group reported that its proposed merger with Rocket Companies Inc. (NYSE:RKT) has progressed further with the expiration of the waiting period under the respective regulatory act on June 4, 2025. As such, this development satisfied a key regulatory condition required for closing the deal, and thus the companies can progress towards finalizing the transaction.
That said, the companies are still awaiting other necessary approvals, including shareholder consent and additional regulatory clearances. However, management has reiterated its expectation that the deal will close in the fourth quarter of 2025.
The transaction, first announced on March 31, 2025, involves an all-stock merger in which Mr. Cooper shareholders will receive 11 Rocket shares for each share they hold. At the time of the announcement, this implied an equity value of $9.4 billion for Mr. Cooper, reflecting a 35% premium over its 30-day average price. Once completed, Rocket shareholders will own approximately 75% of the combined entity, with Mr. Cooper shareholders holding the remaining 25%.
Managements on both sides are upbeat as they are about to form the strongest mortgage company in the industry. The deal combines Rocket’s origination scale and technology with Mr. Cooper’s industry-leading servicing platform. Together, the merged company will service more than $2.1 trillion in loans across nearly 10 million clients, roughly one in every six mortgages in the country. The companies estimate $500 million in annual run-rate synergies from operational efficiencies and revenue enhancements.
Mr. Cooper Group Inc. (NASDAQ:COOP) is the largest home loan servicer in the U.S., focused on delivering a variety of servicing and lending products, services, and technologies. It provides customer-centric servicing, origination, and transaction-based services related principally to single-family residences throughout the country.
8. The Mosaic Company (NYSE:MOS)
3-Month Price Change: 29.4%
Forward PE: 12.1
Number of Hedge Fund Holders: 48
The Mosaic Company (NYSE:MOS) is one of the 20 undervalued momentum stocks that are taking off. While Scotiabank has become more cautious on fertilizer stocks overall, Mosaic Co. (MOS) continues to stand out as an exception. Analyst Ben Isaacson reiterated a Buy rating on the stock, raising the price target to $42 from $34 in May and reaffirmed it again in early June. Notably, Mosaic remains the only Buy-rated name in Scotiabank’s global fertilizer coverage.
This supportive view comes despite the analyst’s broader recommendation to reduce exposure to the fertilizer sector. According to Isaacson, a combination of subdued grower sentiment, softening NPK (nitrogen, phosphate, potassium) fertilizer prices, and shifting investor sentiment has led to a more conservative outlook on the group.
In line with the changing industry dynamics, Mosaic revised its second-quarter and 2025 outlook on June 6. While the company guided phosphate prices to rise modestly in the second quarter, full-year production volume is now expected to be 7.0-7.3 million tonnes, down from the earlier expected range of 7.2-7.6 million tonnes.
On the Potash side, both prices and volumes are expected to remain stable in the second quarter and full year. Full-year production volumes guidance was kept unchanged at 9.0-9.4 million tonnes.
The Mosaic Company (NYSE:MOS) is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients.
7. Carnival Corporation & plc (NYSE:CCL)
3-Month Price Change: 23.1%
Forward PE: 12.8
Number of Hedge Fund Holders: 55
Carnival Corporation & plc (NYSE:CCL) is one of the 20 undervalued momentum stocks that are taking off. Bank of America Securities analyst Andrew Didora has reiterated a Buy rating on Carnival Corp. following the company’s better-than-expected Q2 FY 2025 results, which it announced on June 24. The price target remains unchanged at $31.
Carnival delivered a strong performance in the second quarter (FY ends in November) with Q2 results substantilly exceeding consensus driven by higher net yields and solid cost control. This led to an upward revision in full-year EBITDA guidance by the company. These results also underpin the management’s execution capabilities and ability to deliver on financial targets.
For the second half of 2025, Carnival expects a stable performance which is in line with its earlier guidance. The upcoming launch of Celebration Key, a new private island destination, is expected to support yield growth and strengthen customer engagement.
One of the key positives in Didora’s view is Carnival’s consistent progress on reducing debt. The company has also been focussing on improving its balance sheet and has progressed on this objective to a good extent. Such improvement should support investor confidence and long-term financial flexibility.
Valuation also remains supportive. With the stock still trading below its historical average, BofA sees room for upside as Carnival continues to execute on both operational and financial fronts.
Carnival Corporation & plc is the largest global cruise company and among the largest leisure travel companies. Its portfolio includes world-class cruise lines, including AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Princess Cruises, and Seabourn.
6. Lyft Inc. (NASDAQ:LYFT)
3-Month Price Change: 26.9%
Forward PE: 13.5
Number of Hedge Fund Holders: 56
Lyft Inc. (NASDAQ:LYFT) is one of the 20 undervalued momentum stocks that are taking off. On June 24, TD Cowen analyst John Blackledge upgraded Lyft Inc. to Buy from Hold, raising the price target from $16 to $21. Notably, he named Lyft his “Best SMID-cap Idea” (small and mid-cap stock idea) for 2025.
Blackledge pointed to several key factors behind his upgraded view. One of the main reasons was Lyft’s focus on smaller U.S. markets. As per the analyst, cities such as Charlotte and Indianapolis showed over 30% year-over-year growth in Q1 2025, suggesting strength outside the company’s traditional top-tier markets.
International expansion was another reason. The analyst highlighted Lyft’s planned acquisition of FREENOW, a European mobility platform, which is expected to contribute roughly €1 billion in annual gross bookings. Growth in Canada has also been notable, up 100% in 2024 and continuing with 50% growth in Q1 2025.
The analyst also highlighted that product innovation and improved user experience are also supporting the company’s growth. Blackledge pointed to initiatives such as Price Lock, which allows users to lock specific fares while helping Lyft build a base of recurring subscription revenue. The recent partnership with DoorDash is also driving user engagement and expanding the active rider base.
Blackledge believes Lyft is executing well and doesn’t need to gain market share from Uber, as it currently holds about 30% of the U.S. rideshare market, for its stock to perform. Over the long term, he sees upside from autonomous vehicles, which should expand the overall market opportunity.
Lyft Inc. (NASDAQ:LYFT) is a leading ride-sharing and mobility-as-a-service company that connects passengers with drivers through its digital platform. The company operates in major cities across the U.S. and Canada, offering ride-hailing, bike and scooter rentals, and fleet management solutions.
5. Tenet Healthcare Corporation (NYSE:THC)
3-Month Price Change: 32.0%
Forward PE: 13.7
Number of Hedge Fund Holders: 62
Tenet Healthcare Corporation (NYSE:THC) is one of the 20 undervalued momentum stocks that are taking off. On June 11, RBC Capital analyst Ben Hendrix reiterated a Buy rating on Tenet Healthcare (THC), maintaining a price target of $189. The reaffirmation follows recent volatility in hospital stocks triggered by a White House memo regarding Medicaid supplemental payment programs.
While the memo raised concerns, particularly around potential reductions in state-directed payments, Hendrix views the market reaction as overdone. He notes that the language in the memo aligns with that in the current budget bill that allow for the continuation, or “grandfathering,” of existing programs. Therefore, in his view, the memo does not introduce any new or material headwinds for hospital earnings.
Hendrix sees the pullback in hospital names as a buying opportunity, especially for acute care providers like HCA Healthcare, Community Health, Ardent Health, and, notably, Tenet. He believes Tenet is well-positioned due to its relatively lower exposure to the Medicaid-directed payment programs that have come under scrutiny. This could help the company remain insulated, and do relatively better compared to its peers.
Therefore, Tenet remains the analyst’s top pick in the hospital sector. He believes that the recent weakness in the stock offers a more attractive entry point for long-term investors.
Tenet Healthcare Corporation (NYSE:THC) is a diversified healthcare services company that operates a nationwide care delivery network, including ambulatory surgery centers, surgical hospitals, and a national portfolio of acute care and specialty hospitals.
4. Dell Technologies Inc. (NYSE:DELL)
3-Month Price Change: 27.4%
Forward PE: 12.6
Number of Hedge Fund Holders: 63
Dell Technologies Inc. (NYSE:DELL) is one of the 20 undervalued momentum stocks that are taking off. On June 26, Morgan Stanley’s Erik Woodring reiterated his Buy rating on Dell Technologies, maintaining a price target of $135.
His outlook was based on Dell’s solid position which enables it to benefit from accelerating demand for AI servers, which he believes could drive earnings meaningfully above current expectations. According to Woodring, while the ramp-up in AI infrastructure may introduce pressure on operating margins, Dell should be able to manage these challenges effectively through disciplined cost control.
While the company is transitioning towards a more capital-intensive product mix, the analyst highlights that Dell’s operational efficiency should support its margins. In addition, the management’s execution in its core storage business is expected to offset potential headwinds and support overall margin expansion.
In essence, Woodring’s investment case for Dell rests on the company’s ability to convert its AI server momentum into sustainable earnings growth while maintaining margin discipline. In his view, better operating margins could prove to be a catalyst for substantial share price upside.
Dell Technologies Inc. (NYSE:DELL) is a key player in IT infrastructure modernization. Its extensive product portfolio includes personal computers, servers, storage solutions, networking, software, and cybersecurity.
3. Newmont Corporation (NYSE:NEM)
3-Month Price Change: 24.5%
Forward PE: 14.4
Number of Hedge Fund Holders: 65
Newmont Corporation (NYSE:NEM) is one of the 20 undervalued momentum stocks that are taking off. While Newmont’s recent asset sale reflects a portfolio realignment toward core operations, the firm stands to benefit from structural support for gold prices and robust demand from central banks in the medium term.
A subsidiary of Newmont Corp. recently announced the sale of a portfolio of Australian copper-gold exploration projects to Inflection Resources. Under the agreement signed on June 13, Inflection will acquire 100% ownership of assets located in New South Wales and the Northern Territory, regions considered highly prospective for copper-gold mineralization. This transaction is expected to close in the coming weeks, pending the completion of license transfers and the issuance of shares to Newmont.
At the same time, macro trends continue to support gold miners like Newmont. A recent World Gold Council survey indicated that central banks are planning record gold purchases over the next year. Motivated by geopolitical risks and concerns around the long-term status of the U.S. dollar, 95% of surveyed central banks intend to increase their gold holdings.
In contrast, 75% of respondents expect to reduce their U.S. dollar exposure over the next five years. Notably, more central banks are choosing to store gold domestically, reflecting growing caution around geopolitical issues in traditional reserve locations such as New York or London.
Newmont Corporation (NYSE:NEM) is primarily a gold producer with significant operations and assets in the United States, Canada, Mexico, and other parts of the world.
2. Western Digital Corporation (NASDAQ:WDC)
3-Month Price Change: 46.4%
Forward PE: 11.4
Number of Hedge Fund Holders: 78
Western Digital Corporation (NASDAQ:WDC) is one of the 20 undervalued momentum stocks that are taking off. Morgan Stanley analyst Erik Woodring, on June 17, reinforced his positive stance on Western Digital (WDC), raising the price target to $78 from $70 following recent discussions with company management. His Overweight rating remains unchanged, reflecting increased confidence in WDC’s earnings potential and strategic positioning in the HDD segment.
Woodring has revised his long-term EPS estimates upward by up to 10%, citing improvements in gross margin expectations, earlier-than-expected deleveraging, and more timely capital returns. He sees these developments as key factors for re-rating the stock in coming months.
Back in May, the analyst had already raised his price target from $54 to $70. In the update, he had stated that Western Digital’s could substantially benefit from the surge in data center expansion. While the company still trails Seagate in HAMR technology, the analyst believes HDDs will continue to dominate the storage landscape, given the exponential growth in global data generation.
He also viewed WDC’s valuation as compelling, as it traded at a notable discount to peers with a PE of less than six times peak EPS. This underlines the stock’s potential upside, particularly if supported by continued strength in the HDD cycle, monetization of its SanDisk asset, and improved shareholder returns through potential dividend increases.
Western Digital Corporation (NASDAQ: WDC) is a leading developer and manufacturer of data storage devices and solutions. The company’s product range includes hard disk drives (HDDs), solid-state drives (SSDs), and external storage systems tailored for both consumer and enterprise markets.
1. Micron Technology Inc. (NASDAQ:MU)
3-Month Price Change: 33.8%
Forward PE: 11.2
Number of Hedge Fund Holders: 96
Micron Technology Inc. (NASDAQ:MU) is one of the 20 undervalued momentum stocks that are taking off. As per Q3 2025 (FY ends in August) earnings results announced on June 25, the company delivered record revenue, with data center sales more than doubling year-over-year and DRAM revenue reaching an all-time high, driven by nearly 50% sequential growth in high-bandwidth memory (HBM). The compay generates strong free cash flows which support continued strategic investment, while a newly reorganized business structure aligns more closely with AI-driven demand.
Looking ahead, Micron expects 15% sequential revenue growth in the fourth quarter, reaching $10.7 billion. The company’s long-term potential is further reinforced by its recently announced $200 billion U.S. investment plan, focused on manufacturing and R&D to support sustained leadership in memory and storage innovation.
Following Micron’s May quarter results on June 26, JP Morgan analyst Jay Kwon raised the stock’s price target to $165 from $135 while maintaining an Overweight rating. In his recent note, Kwon called the quarter as solid and pointed to a strong outlook for the upcoming quarter.
The primary reason for the improved sentiment is growing demand in key areas, especially the high-bandwidth memory (HBM) and data center products. Kwon also highlighted continued strength in consumer-related applications, which contributed to the company’s overall performance.
As a result, the analyst raised its earnings estimates for Micron, and sees a favourable setup for the stock in the second half of 2025, supported by improving fundamentals and a constructive demand environment.
Micron Technology Inc. (NASDAQ:MU) designs, develops, manufactures, and markets memory and storage products, including dynamic random-access memory (DRAM), flash memory (NAND), solid-state drives (SSDs), and High Bandwidth Memory (HBM) globally.
While we acknowledge the potential of MU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MU and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
