3 Momentum Stocks That Could Soar Post-Market Volatility

Key Points

• After tariff-related sell-offs cleaned the slate, a number of new companies are emerging as potential momentum leaders in the recovery period.
• Certara and Schrödinger are firms operating in the model-based drug development space, which has seen a boost thanks to technological developments and shifting regulatory practices.
• Lovesac is a furniture maker that, with its flexible sourcing approach, is bucking the trend of companies reliant on costly supply chains.

While the impact of unanticipated tariff policy changes in early April was market-wide, the recovery has been less even. Despite a major rebound following the sell-off, some firms have been sluggish to reclaim lost ground. This has given faster-moving stocks an opportunity to stand out as fresh momentum plays in the meantime.

Investors looking for high-momentum stocks following this period of turbulence should consider whether the factors are short-term or indicative of potentially longer-term trajectories.

Two companies in the software-based drug development space—a portion of the larger pharmaceuticals industry—have emerged as momentum plays thanks to impressive results, optimistic news, and advantageous technological and regulatory developments.

At the same time, a furniture maker suggests a new model of adaptability as uncertainty around future tariffs lingers and threatens to continue to drag down the stock price of companies more heavily involved in importing materials or products.

AI Drug Simulation Firm Surges 30% YTD on Strong Outlook and $100M Buyback

The technology in support of software-designed drug development has blossomed in recent years as AI has proliferated, and the result is that model-informed biosimulation firms like Certara Inc. NASDAQ: CERT have seen greater investor attention than ever.

Though shares have been up and down in the last year, Certara stock got a big boost in mid-April when it reiterated its full-year 2025 guidance based on a preliminary review of first-quarter results. The company still expects to achieve revenue between $415 million and $425 million and adjusted earnings per share of 42 cents to 46 cents for the year.

In another signal of optimism, Certara authorized a $100-million share repurchase program, while major investor Arsenal Capital Partners agreed to a one-year share lock-up.

While these may have inspired a short-term boost in share price, the company's announcement of a new version of its Simcyp Simulator, which forecasts how drugs will behave in bodily tissues, may continue to drive upward momentum. 

Together, these factors helped to propel CERT shares up about 30% year-to-date (YTD) as the stock emerged as an early leader following the extreme volatility in the first weeks of April.

Drug Discovery Stock Jumps 25% YTD on FDA Policy Shift and Legal Resolution

Schrödinger Inc. NASDAQ: SDGR operates in much the same space as Certara, offering software and a computational platform to aid in drug discovery.

The company boasts a robust product portfolio, with additional innovations currently in development and a solid track record of partnerships with leading pharmaceutical firms. However, it was two major developments in the spring that accelerated the rally in SDGR shares, which are up approximately 25% year-to-date.

First, the FDA announced in early April that it would phase out animal testing in favor of human-relevant methods, a move widely seen to benefit Schrödinger's models.

Second, around the same time, the company reached a settlement in a lawsuit concerning its non-employee director compensation practices—likely closing the chapter on a legal issue that had long cast a shadow over the firm.

Investors may now be more inclined to focus on expanded partnerships with companies like Novartis AG NYSE: NVS, which was announced along with a $150-million upfront payment in November 2024 and should continue to boost revenue going forward. 

Modular Furniture Stock Soars 23% on Earnings Beat and New Product Launches

The Lovesac Co. NASDAQ: LOVE makes modular furniture. In mid-April, the company released an excellent earnings report in which it topped EPS expectations by 33 cents, coming in at $2.13. Lovesac also announced the launch of three new product platforms over the coming years.

With furniture companies subject to higher materials costs as a result of tariffs, Lovesac stands apart thanks to its modular product design.

The company says this allows it to have increased flexibility in its supply chain. With redundant sourcing across multiple countries, Lovesac can shift its operations to capitalize on any given geopolitical scenario.

The major boost to Lovesac's share price following these announcements has caused LOVE stock to rise about 23% in the last month.

However, with a P/S ratio of 0.43, it may still be undervalued—indeed, analysts expect the share price to continue rising by about 62%.