It’s never a great feeling to be watching a stock go parabolic while you’re sitting on the sidelines. Undoubtedly, none of us want to chase a hot stock just in time for the steep pullback. Though many parabolic rallies do end in a painful correction (or even a crash), not at all of them do. In fact, some parabolic moves may not fully reflect the positive change in the growth narrative and the fundamentals.
High-flying GPU behemoth Nvidia (NASDAQ:NVDA) is a top name that immediately comes to mind as a winner that just finds new ways to keep on winning for investors, including those who may have bought shares a bit late in the game.
Although NVDA stock will eventually suffer a painful plunge, it remains to be seen where there are still multi-bagger moves left before the time comes. Though risky, Nvidia represents one of those rare generational names that can prove cheaper than originally thought, as it makes the most of the wind at its back.
Here are three more hot runners that may have enough gas to keep going.
Chipotle Mexican Grill (CMG)
Chipotle Mexican Grill (NASDAQ:CMG) keeps serving up hot gains for investors at a time when many folks are shunning quick-serve restaurants and fast-food joints in favor of home cooking. Undoubtedly, Chipotle may have the edge to take market share from rivals, even as prominent industry headwinds weigh.
Compared to most other fast-food firms, Chipotle has the freshness factor down far better than its rivals. This allows the firm to command a higher price tag and, perhaps more remarkably, pass higher costs onto consumers amid inflation without having them run out the door.
Moving ahead, Oppenheimer analyst Brian Bittner still views CMG stock as a great buy despite the stretched price tag and the hot run behind it (shares are up almost 40% year to date). They conducted a survey that found prices on certain goods, like chicken, have actually come down. In a post-inflation climate, Chipotle still looks positioned to win.
As the restaurants encounter a bit of deflation for the summer (hello, value menus!), Chipotle looks positioned to retain and continue growing its share. All considered, CMG stock has the catalysts it needs to keep its run going strong.
Vertiv (VRT)
If there’s a momentum stock out there that has more heat than Nvidia, it’s high-flying data center equipment maker Vertiv (NYSE:VRT). Year to date, VRV stock has more than doubled, surging around 115%. In the past year, shares have soared over 400%—a blistering move that is definitely not sustainable. Just because the road ahead won’t be as prosperous as the one behind doesn’t mean VRT stock is a name to scratch off your radar.
Like Nvidia, Vertiv stock doesn’t look insanely expensive after its euphoric run at just 43.7 times forward P/E. It’s striking just how robust the growth and magnitude of tailwinds are for the firm. With the company launching a new AI Hub ahead of Nvidia’s next-generation chip launch, I would not be surprised if VRT continues to leave the rest of the market behind.
At some point, a serious pullback in VRT stock is in order. But until the P/E multiple swells markedly, I’m just not sure when that time will be. If you consider yourself a risk-taker, perhaps the stock is worth nibbling on, even at close to $100 per share. Just be ready for wilder moves in the second half.
Western Digital (WDC)
Don’t forget about the data storage hardware firms, which are poised to thrive in the AI boom. Undoubtedly, Western Digital (NASDAQ:WDC) is a fantastic storage firm that many have discovered still has a lot to gain as the AI boom rolls on.
Despite soaring more than 93% in the past year, I still find WDC stock to be an intriguing value option that may just have more room to run in the year ahead. At 12.0 times forward P/E, WDC stock may very well be the momentum stock to own if you’re looking to play “catch up” at this point in the AI race.
Despite the heated run, the stock is nowhere close to all-time highs, which haven’t been seen in nearly a decade. In any case, as a top storage hardware innovator who stands to benefit from a continuation of the steep cyclical upswing for storage hardware, I’d not sleep on the name.
On the date of publication, Joey Frenette did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
