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. Keeping that in mind, here is one stock we think lives up to the hype and two best left ignored.

Two Momentum Stocks to Sell:

Chewy (CHWY)

One-Month Return: +20.2%

Founded by Ryan Cohen, who later became known for his involvement in GameStop, Chewy (NYSE: CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.

Why Are We Cautious About CHWY?

1. Sizable revenue base leads to growth challenges as its 9.8% annual revenue increases over the last three years fell short of other consumer internet companies
2. Estimated sales growth of 4.5% for the next 12 months implies demand will slow from its three-year trend
3. Gross margin of 28.8% reflects its high servicing costs

At $43.30 per share, Chewy trades at 27.5x forward EV/EBITDA. Check out our free in-depth research report to learn more about why CHWY doesn’t pass our bar.

Semtech (SMTC)

One-Month Return: +55.7%

A public company since the late 1960s, Semtech (NASDAQ: SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.

Why Is SMTC Risky?

1. Persistent operating losses and eroding margin over the last five years point to its preference for growth over profits
2. Cash burn has widened over the last five years, making us question whether it can reliably generate shareholder value
3. Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam

Semtech’s stock price of $38.44 implies a valuation ratio of 22.8x forward P/E. To fully understand why you should be careful with SMTC, check out our full research report (it’s free).

One Momentum Stock to Watch:

Curtiss-Wright (CW)

One-Month Return: +28.8%

Formed from a merger of 12 companies, Curtiss-Wright (NYSE: CW) provides a range of products and services to the aerospace, industrial, electronic, and maritime industries.

Why Does CW Catch Our Eye?

1. Market share has increased this cycle as its 10.6% annual revenue growth over the last two years was exceptional
2. Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
3. Share repurchases over the last two years enabled its annual earnings per share growth of 18.2% to outpace its revenue gains

Curtiss-Wright is trading at $415.43 per share, or 33.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.