It starts as a slight itch, or maybe a brief churn in your stomach. You try to ignore it, but eventually the symptoms are unavoidable and you need to take action. No, we aren’t talking about your mother-in-law’s cooking, we’re talking about investing FOMO, or the fear of missing out.
FOMO is an emotional reaction in which impatient traders pile into high-flying stocks, creating upward momentum. However, this contradicts one of the most timeless investing axioms: Buy Low, Sell High. If you feel FOMO is starting to course through your veins, avoiding rash decisions is crucial.
But you can still take advantage of this summer’s hot stocks by carefully watching the charts and identifying entry and exit points that fit your trading goals.
Today, we’ll look at three different momentum stocks that fit that criteria. Remember, these are FOMO stocks, not undervalued diamonds in the rough.
The fundamentals may not always look appealing, but these stocks possess catalysts and momentum that could present enticing opportunities.
CoreWeave: Fueling the IPO Resurgence
[content-module:Forecast|NASDAQ: CRWV]In late last year, one aspect Wall Street embraced with then-President-elect Trump was the idea that merger activity and the initial public offering (IPO) market would heat up under a more lenient regulatory framework.
Unfortunately, that wave didn’t materialize as the Trump administration retained many of President Biden's initiatives at the Federal Trade Commission. M/A activity continues to be frosty, but the IPO market is finally picking up, led by AI darling CoreWeave Inc. (NASDAQ: CRWV).
CRWV shares are up more than 150% since debuting on the NYSE in the first week of April, and there’s reason to believe the stock isn’t finished yet. First, the company has the backing of AI kingmaker NVIDIA Corp. (NASDAQ: NVDA), which owns more than 24 million CRWV shares.
The holding represents more than 78% of NVIDIA’s total stock portfolio, and gives it control of 7% of the Class A shares. Another bullish catalyst emerged last week with a deal to purchase 250 megawatts of power from Applied Digital, which sent the latter’s stock soaring as well.
CoreWeave’s symbiotic relationship with NVIDIA and impressive revenue growth could fuel further gains this summer. The Relative Strength Index (RSI) is also back under 70, indicating that the recent pullback might be a decent entry point for new positions.
Palantir: Fully Embedded in the Government Machine
[content-module:Forecast|NASDAQ: PLTR]One company that has traded like a 2021 meme stock this year is Palantir Technologies Inc. (NASDAQ: PLTR), the data analytics firm scoring government contract after government contract along bipartisan lines. The company began working with the Biden administration in 2023 to design AI safeguards and continues to receive funding from the Trump administration, which has already allocated $113 million to Palantir and has promised an additional $795 million through the Department of Defense (DoD).
When both sides of the aisle are willing to open their pocketbooks, it's never bad news for business.
Like most FOMO stocks, PLTR’s fundamentals may make a value investor queasy. The valuation is quite high, with the stock trading at more than 650 times earnings based on a $300 billion market cap and $462 million in net income over the last 12 months.
Additionally, concerns about surveillance overreach continue to get louder as the company expands deeper into government services. But the momentum is hard to ignore, and PLTR shares are on the cusp of a new all-time high with the RSI sitting at a comfortable 56. Expect more gains ahead for the latest government money muncher.
Tesla: Fade the Trump Feud
[content-module:Forecast|NASDAQ: TSLA]While Palantir continues to ingratiate itself into the federal government, Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk is now persona non grata at the White House. A messy breakup seemed inevitable for the Trump-Musk alliance, but few could have predicted how quickly it would escalate to personal and vindictive levels.
Trump threatened to cut all funding to Musk’s contracts with the federal government, and Musk responded by musing about decommissioning the Dragon spacecraft, a line of SpaceX vessels that has been making journeys to the International Space Station since 2012. It was a day that will live in social media infamy, and the market responded by knocking TSLA down by more than 14%.
Musk needs the government money spigot, but Washington also needs the tech from his companies, so this feud likely has more bark than bite.
And while the One Big Beautiful Bill circulating in Congress would slash the EV credit Tesla heavily depends on, the final version is still far from Trump’s desk. In the meantime, TSLA shares have several catalysts on the horizon that could make this selloff short-lived. After years of overly optimistic promises, the RoboTaxi rollout is finally, definitely (maybe) happening in Austin later this month.
A successful RoboTaxi launch would fuel hype toward the company’s long-term AI and robotics goals. And investors have no reason to fear a 200 P/E for a stock like TSLA, which has seen rallies start when the P/E ratio was north of 1000. Wedbush analyst Dan Ives, who frequently touts the stock on his CNBC appearances, set a new price target of $500 last week, implying a staggering upside of more than 60%.
If even Ives' target is off by half, that’s an impressive gain for investors from current levels. And hey, they’ve still got all that Bitcoin too. TSLA is always a bumpy ride, but it remains the ultimate FOMO stock in the tech sector and one active traders should keep an eye on.
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