3 Momentum Picks From 2024 Poised for More Gains in 2025

Key Points

• Momentum in these stocks for 2024 might not be over into 2025, as the relative valuations compared to how much EPS can grow in these names call for more.
• Wall Street analysts agree, as they now see a double-digit upside in each of these names.
• Institutional capital is starting to get behind these stocks today as well.

As an indicator, Momentum can be one of the strongest measures of success for a stock or an industry. When it comes to how the year 2024 ended, some stocks got very close to their 52-week highs but are expected to keep going even higher in 2025. Investors shouldn’t look at an absolute performance here but rather a relative one to the highs set for 2024.

Then, as investors wonder whether there is enough fuel left in the tank, they can look at some of the valuation metrics that combine both ceiling room and potential growth. One of these can be the price-to-earnings growth ratio (PEG), a measure that considers today’s stock valuation and a valuation relative to how much the market thinks earnings per share (EPS) can grow.

Knowing that markets will always overpay for a stock that is expected to grow, finding both a bullish price momentum relative to 52-week highs. A favorable PEG ratio can be the winning formula for investors this year. On that note, stocks like Antero Resources Co. NYSE: AR, Taiwan Semiconductor Manufacturing Co. NYSE: TSM, and even Spotify Technology NYSE: SPOT have made it to the list fitting this criteria.

Natural Gas Rallies Help Antero Resources Stock

After delivering a one-year performance of up to 56.3%, Antero stock is set up to keep giving investors double-digit upside potential in the coming quarters. The reason behind this energy stock setup is the Wall Street analyst forecast for up to $0.32 in EPS for the next 12 months, a significant increase from today’s net loss of $0.24.

This massive jump in earnings means that Antero Resources stock’s PEG ratio is below 1.0x, and anything below 1.0x means that the stock’s valuation multiples today are low relative to how much the market expects its EPS to grow in the future. That’s one check off the list to believe Antero Resources stock will keep its momentum in 2025.

Then there is the recent wave of Wall Street analyst upgrades, with the most recent coming in from Mizuho in December 2024. These analysts boosted their valuations on Antero Resources stock to $40 a share from their previous $35 a share, meaning they now see up to 14.3% upside from where the stock trades today.

In November 2024, those from Raymond James were willing to rate Antero Resources stock as a strong buy and then boosted their price targets to $44 a share, calling for as much as a 25.8% upside from today’s levels as well.

Taiwan Semiconductor Stock: On the Verge of Breaking Out

After finishing the year with an impressive 101.2% run, Taiwan Semiconductor stock has gained the favor of Wall Street analysts to let it keep its momentum going into 2025. Namely, those from Barclays decided to keep their overweight rating on the company, but this time valuing it much higher than before.

As of November 2024, these analysts saw Taiwan Semiconductor stock's valuation closer to $240 a share, a significant boost from its previous $215 a share. They also called for up to 16% upside from where the stock trades today. As bullish as this might seem, it is still somewhat on the conservative side.

These analysts also expect EPS to grow to $2.30 in the next 12 months, which would mean a net growth of around 20% compared to the stock's current valuation and a PEG ratio of under 1.0x. Knowing this, investors shouldn't be surprised to see the company's short interest fall by 15.5% over the past month.

After this clear sign of bearish capitulation, concluding that 2025 holds bullish momentum for this company is more logical than ever.

Spotify: Subscription Businesses Will Win in 2025

With economic uncertainty, geopolitical tensions, and the Fed being punished for prematurely cutting interest rates, subscription-based businesses will likely win the new year. This is because revenue and earnings are more stable and predictable, making for stronger businesses as well.

This might be why shares of Spotify delivered a 147.9% run over the past 12 months and also why Wall Street analysts feel so comfortable forecasting up to 33.75% in EPS growth for the next 12 months. Just like the others on this list, Spotify stock trades at a PEG ratio below 1.0x, meaning there is absolutely more room to grow.

Based on this setup, analysts at Bank of America decided to keep their buy rating on Spotify stock, only this time boosting their valuations up to $515 a share, calling for as much as 10.3% upside from where the stock trades today. This could, however, be on the conservative side, and an institutional buyer decided to call this fact out.

Those at Principal Financial Group boosted their Spotify stock holdings by 11.8% as of December 2024, bringing their net position to a high of $14.6 million today. This recent buy tells investors all they need to know about the potential upside in Spotify stock for 2025.