The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.
While momentum can be a leading indicator, it has burned many investors as it doesn’t always correlate with long-term success. Keeping that in mind, here are three stocks getting more buzz than they deserve and some you should buy instead.
Microchip Technology (MCHP)
One-Month Return: +27.5%
Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.
Why Is MCHP Risky?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.2% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- 14.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Microchip Technology’s stock price of $65.36 implies a valuation ratio of 33.2x forward P/E. If you’re considering MCHP for your portfolio, see our FREE research report to learn more.
Applied Digital (APLD)
One-Month Return: +10.4%
Pivoting from its origins in cryptocurrency mining to become a key player in the AI infrastructure boom, Applied Digital (NASDAQ: APLD) designs and operates specialized data centers that provide high-performance computing infrastructure for artificial intelligence and blockchain applications.
Why Are We Hesitant About APLD?
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 83.8% annually while its revenue grew
- Free cash flow margin dropped by 54.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $26.27 per share, Applied Digital trades at 75.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than APLD.
IAC (IAC)
One-Month Return: +20.2%
Originally known as InterActiveCorp and built through Barry Diller's strategic acquisitions since the 1990s, IAC (NASDAQ: IAC) operates a portfolio of category-leading digital businesses including Dotdash Meredith, Angi, and Care.com, focusing on digital publishing, home services, and caregiving platforms.
Why Should You Dump IAC?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 15% annually over the last two years
- Earnings per share have dipped by 19.6% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Negative returns on capital show management lost money while trying to expand the business
IAC is trading at $39.94 per share, or 28x forward P/E. Read our free research report to see why you should think twice about including IAC in your portfolio.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
