Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. All that said, here are two stocks with lasting competitive advantages and one best left ignored.

One Momentum Stock to Sell:

Commvault Systems (CVLT)

One-Month Return: +23%

Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention, and compliance.

Why Are We Wary of CVLT?

1. Muted 9% annual revenue growth over the last three years shows its demand lagged behind its software peers
2. Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 1.6 percentage points

Commvault Systems is trading at $176 per share, or 7.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CVLT.

Two Momentum Stocks to Buy:

The Trade Desk (TTD)

One-Month Return: +56.3%

Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ: TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.

Why Will TTD Outperform?

1. Average billings growth of 26.1% over the last year enhances its liquidity and shows there is steady demand for its products
2. Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
3. Highly efficient business model is illustrated by its impressive 17.6% operating margin, and its operating leverage amplified its profits over the last year

The Trade Desk’s stock price of $74.33 implies a valuation ratio of 13x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.

Axon (AXON)

One-Month Return: +33.4%

Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.

Why Are We Backing AXON?

1. Unit sales averaged 32% growth over the past two years and imply healthy demand for its products
2. Free cash flow margin expanded by 20.3 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
3. Improving returns on capital suggest its past investments are beginning to deliver value

At $723 per share, Axon trades at 123.2x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.