The U.S. stock market closed on a downbeat on Friday, January 31, as investors grappled with the announcement that President Donald Trump’s new tariffs on major trading partners would take effect the following day. The Dow Jones Industrial Average tumbled 0.75%, to close at 44,544.66 and the S&P 500 shed 0.50% to close at 6,040.53, while the Nasdaq Composite slipped 0.28% to 19,627.44. However, the day marked the end of a tumultuous January for traders with the three major averages still managing to post monthly gains. The S&P 500 rose 2.7%, the Nasdaq advanced 1.6%, and the Dow surged 4.7%.
Economic data released on Friday also influenced market sentiment. The December data for the personal consumption expenditures (PCE) price index, which is the preferred inflation gauge of the Federal Reserve, showed an increase of 0.3% from November and a 2.6% annual rate. While this yearly advance was in line with economists’ expectations, it marked an acceleration from the prior month’s annual rate of 2.4% and raised concerns that inflation remains sticky.
Tom Hainlin, a senior investment strategist at U.S. Bank Asset Management Group, noted that the market’s initial reaction to the tariff news was to sell, much like the reaction to the DeepSeek AI developments earlier in the week. Trump will be imposing a 25% tariff on Canada and Mexico, alongside a 10% duty on China. However, Hainlin explained that there are no details about tariffs, whether they are temporary or permanent, or what the potential responses from Canada, Mexico, or China might be.
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In an interview with CNBC on January 22, Jamie Dimon, Chairman and CEO at JPMorgan Chase, discussed a range of economic and political issues, including market conditions, the impact of a strong dollar, and the broader economic policies of the United States. Dimon began by addressing that the current state of the U.S. stock market is elevated and stocks trading at a historic price-to-earnings ratio. Dimon believes that the stock prices must be justified by strong growth and there is a need for good outcomes to sustain these levels.
Dimon suggested that the strength of the dollar is an outcome of broader economic factors and that a strong dollar can have its benefits but it can also have negative effects, especially for international companies dealing with tariffs and trade tensions. However, Dimon downplayed the significance of the strong dollar, stating that it is less important than many people think and that the most crucial factor remains economic growth.
Dimon further discussed the challenges of implementing growth strategies, emphasizing that while many recognize the need for change, the real challenge lies in execution. He also addressed the geopolitical issues with Ukraine, Iran, Russia, North Korea, and China, expressing that these issues can affect the world in the long term. He noted that while tariffs are a significant topic of discussion, they are just a tool in a broader economics and national security strategy. Overall, Dimon is cautiously optimistic about the economy and highlighted concerns about government spending, potential inflation, and the global economic landscape.
While the market appears overvalued and faces significant headwinds, some stocks are performing exceptionally well and hold significant potential. With that in context, let’s take a look at the 12 best booming stocks to invest in now.
A close-up of a trader at a trading desk intently watching the market as prices rise and fall.
Our Methodology
To compile our list of the 12 best booming stocks to invest in now, we used Finviz and Yahoo stock screeners to identify the 30 largest companies whose stock prices have increased by at least 35% year-to-date as of January 30. We then used Insider Monkey’s Hedge Fund database to rank 12 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best Booming Stocks to Invest in Now
12. Dana Incorporated (NYSE:DAN)
Number of Hedge Fund Holdings: 24
Year-to-Date Performance as of January 30: 43.43%
Dana Incorporated (NYSE:DAN) is a global leader in drivetrain and powertrain solutions for conventional, hybrid, and electric vehicles. The company provides axles, driveshafts, transmissions, and thermal management products to automakers such as Ford, General Motors, and Tesla. Dana Incorporated (NYSE:DAN) has a presence in more than 30 countries and is expanding its capabilities in e-mobility and advanced propulsion systems.
Dana Incorporated (NYSE:DAN) has recently announced a major cost reduction plan aimed at achieving $300 million in annual cost savings by 2026. These cost-saving measures include reducing engineering and overhead expenses, particularly in the electric vehicle (EV) segment, where the company has decided to adopt a more stringent approach to new business opportunities. The early success of these initiatives, with $10 million in cost savings already realized in the fourth quarter of 2024, has bolstered investor confidence and contributed to the stock’s positive performance.
Another key factor behind Dana Incorporated’s (NYSE:DAN) stock price increase is the company’s decision to divest its Off-Highway business. This strategic move is expected to generate substantial proceeds, which the company plans to use to strengthen its balance sheet and return capital to shareholders. The sale of the Off-Highway segment will allow Dana Incorporated (NYSE:DAN) to focus on its core Commercial and Light Vehicle markets, where it can leverage its expertise and market position more effectively. UBS analysts have noted that the proceeds from this sale will enable the company to move from a net debt to a net cash position and will significantly improve its financial flexibility and free cash flow (FCF) conversion.
11. MP Materials Corp. (NYSE:MP)
Number of Hedge Fund Holdings: 27
Year-to-Date Performance as of January 30: 39.36%
MP Materials Corp. (NYSE:MP) is a leading producer of rare earth minerals that are essential for manufacturing electric vehicles, wind turbines, and high-tech defense systems. The company operates the only large-scale rare earth mine in North America at Mountain Pass, California, and helps reduce U.S. reliance on China for critical minerals. MP Materials Corp. (NYSE:MP) supplies minerals to major manufacturers and government agencies.
MP Materials Corp. (NYSE:MP) has recently inaugurated its state-of-the-art Independence facility in Fort Worth, Texas, which is set to become the first fully integrated rare earth metal, alloy, and magnet manufacturing facility in the United States. One of the primary factors driving the stock price increase for MP Materials Corp. (NYSE:MP) is the commencement of commercial production of neodymium-praseodymium (NdPr) metal at the Independence facility. This milestone marks a significant step in the company’s strategy to reestablish a fully integrated rare earth magnet supply chain in the United States.
MP Materials Corp. (NYSE:MP) has also announced a strategic partnership with General Motors (GM), which has also contributed to the stock’s positive performance. The company will supply a significant portion of the NdFeB magnets required by GM, which will provide a steady demand for the company’s products and will enhance the company’s reputation as a reliable and innovative supplier in the rare earth materials sector.
The increasing global demand for rare earth materials, particularly in the EV and renewable energy sectors, has also been a significant driver of MP Materials Corp.’s (NYSE:MP) stock performance. The company plans to gradually ramp up production at the Independence facility and aims to reach approximately 1,000 metric tons of finished NdFeB magnets per year, which will further solidify the company’s market position and drive long-term profitability.
10. Guardant Health, Inc. (NASDAQ:GH)
Number of Hedge Fund Holdings: 28
Year-to-Date Performance as of January 30: 63.47%
Guardant Health, Inc. (NASDAQ:GH) is a precision oncology company specializing in liquid biopsy tests for early cancer detection and treatment guidance. The company’s flagship product, Guardant360, helps oncologists analyze tumor DNA from blood samples and enables targeted cancer therapies. Guardant Health, Inc. (NASDAQ:GH) collaborates with pharmaceutical firms, hospitals, and research institutions to advance personalized cancer treatment and improve patient outcomes.
Guardant Health, Inc. (NASDAQ:GH) stock has experienced significant gains year to date, driven by a series of positive developments that have bolstered investor confidence and underscored the company’s strong market position. One of the primary catalysts for the stock’s performance has been the company’s preliminary Q4 revenue, which came in at approximately $200 million, surpassing the analyst estimate of $188.9 million. This strong revenue performance is a testament to the growing adoption of the company’s liquid biopsy tests and the expanding market for precision oncology solutions. The company also reported a full-year revenue of approximately $737 million, exceeding the estimated $723.9 million, further solidifying its financial health and growth trajectory.
Another significant factor contributing to Guardant Health, Inc.’s (NASDAQ:GH) stock’s rise is the expansion of Medicare coverage for Guardant Reveal, the company’s liquid biopsy test for monitoring disease recurrence in patients with colorectal cancer. This expansion builds on the existing coverage for early post-surgical testing and significantly broadens the patient population that can benefit from the test. This, in turn, is expected to drive higher adoption rates and contribute to the company’s financial growth.
9. BrightSpring Health Services, Inc. (NASDAQ:BTSG)
Number of Hedge Fund Holdings: 29
Year-to-Date Performance as of January 30: 42.34%
BrightSpring Health Services, Inc. (NASDAQ:BTSG) is a leading provider of home and community-based healthcare solutions. The company offers services in behavioral health, home health care, and pharmacy services and caters to individuals with disabilities, chronic conditions, and specialized medical needs. BrightSpring Health Services, Inc. (NASDAQ:BTSG) has a vast network in the United States and partners with healthcare organizations and insurers to deliver high-quality, cost-effective care.
On January 20, BrightSpring Health Services, Inc. (NASDAQ:BTSG) entered into a definitive agreement to divest its Community Living business, ResCare Community Living, to Sevita for $835 million in cash. The divestiture of the Community Living business allows the company to concentrate on its core Provider Services, which include Home Health and Hospice, Personal Care, Rehabilitation Services, and Primary Care. The divestiture will generate after-tax proceeds of approximately $715 million, which will be primarily used for debt reduction and is expected to strengthen the company’s balance sheet and reduce interest expenses. The improved financial health is a key factor driving investor confidence and contributing to the stock’s upward trajectory.
Furthermore, BrightSpring Health Services, Inc. (NASDAQ:BTSG) has reported preliminary 2024 financial results that surpass previous guidance, with Net Revenue expected to range between $11.20 billion and $11.30 billion, compared to the consensus estimate of $11.17 billion.
8. Option Care Health, Inc. (NASDAQ:OPCH)
Number of Hedge Fund Holdings: 30
Year-to-Date Performance as of January 30: 35.34%
Option Care Health, Inc. (NASDAQ:OPCH) is the largest independent provider of home and alternate-site infusion services in the U.S. The company delivers specialty medications and infusion therapy for patients with chronic conditions including infusion therapy, specialty pharmacy, and clinical management.
Option Care Health, Inc.’s (NASDAQ:OPCH) stock has seen a significant increase year to date, driven by its early sales figures for the fourth quarter of 2024 and the full year. The company reported preliminary net revenue of approximately $1.34 billion to $1.35 billion, representing approximately 19.2% to 20.1% growth over the fourth quarter of 2023, against consensus of $1.27 billion. Option Care Health, Inc.’s (NASDAQ:OPCH) full-year 2024 performance was equally impressive, with preliminary net revenue ranging from $4.99 billion to $5.00 billion, reflecting a 16.0% to 16.2% increase over the prior year. Net income for the year was approximately $208.5 million to $212.6 million, or diluted earnings per share of $1.21 to $1.23. These results not only exceeded consensus estimates but also demonstrated the company’s strong operational efficiency and financial discipline.
Option Care Health, Inc.’s (NASDAQ:OPCH) strong financial performance is driven by the company’s core business of providing infusion and home care services, which has seen a consistent and growing demand. The aging population and the increasing prevalence of chronic diseases, such as cancer, have driven the need for specialized home healthcare services. Furthermore, the company’s robust infrastructure, which includes a wide network of skilled healthcare professionals and advanced medical technologies, has played a crucial role in maintaining high service standards and operational efficiency.
7. Akero Therapeutics, Inc. (NASDAQ:AKRO)
Number of Hedge Fund Holdings: 30
Year-to-Date Performance as of January 30: 98.99%
Akero Therapeutics, Inc. (NASDAQ:AKRO) is a biotechnology company developing treatments for metabolic diseases. The company’s lead candidate, efruxifermin, has demonstrated promising results in reducing liver fat and fibrosis.
Akero Therapeutics, Inc. (NASDAQ:AKRO) has seen a significant surge in its stock price year to date, driven primarily by a series of positive developments including the release of compelling clinical data from its Phase 2b SYMMETRY study. On January 27, the company announced topline results from the study, which evaluated the efficacy and safety of its lead candidate, efruxifermin (EFX), in patients with biopsy-confirmed compensated cirrhosis (F4) due to MASH. The data showed that at week 96, 39% of patients treated with 50mg EFX experienced a reversal of cirrhosis with no worsening of MASH, compared to only 15% in the placebo group. This significant improvement in patient outcomes was a major catalyst for the stock’s 115% increase in early trading on the same day.
In addition to the impressive efficacy data, the safety profile of efruxifermin was also a key factor in boosting investor confidence. The drug was reported to be generally well-tolerated, with no deaths in the EFX arm. The most frequent adverse events were mild to moderate and gastrointestinal in nature, which is a common and manageable side effect in this patient population. This positive safety profile is crucial for a drug targeting a chronic and severe condition like MASH, as it increases the likelihood of regulatory approval and broad adoption by healthcare providers.
The success of the Phase 2b SYMMETRY study has paved the way for Akero Therapeutics, Inc. (NASDAQ:AKRO) to advance efruxifermin into Phase 3 development. The company is already enrolling patients for this next phase of clinical trials, which is a critical step in bringing the drug closer to market.
6. Hims & Hers Health, Inc. (NYSE:HIMS)
Number of Hedge Fund Holdings: 31
Year-to-Date Performance as of January 30: 40.45%
Hims & Hers Health, Inc. (NYSE:HIMS) is a direct-to-consumer telehealth company that provides prescription-based treatments for hair loss, sexual health, mental health, and dermatology. Through its digital platform, the company operates a subscription-based model that connects patients with licensed healthcare professionals for virtual consultations.
Hims & Hers Health, Inc. (NYSE:HIMS) has been benefiting from a regulatory exemption that allows companies to sell compounded versions of FDA-approved drugs during shortages. Taking advantage of this, the company has been offering a compounded version of semaglutide, the active ingredient in Novo Nordisk’s blockbuster weight-loss drugs such as Wegovy and Ozempic. By providing a lower-cost alternative, Hims & Hers Health, Inc. (NYSE:HIMS) has been able to attract price-sensitive consumers. The weight-loss drug market remains a massive opportunity, and the company’s direct-to-consumer model, competitive pricing, and ability to adapt to changing market conditions have helped sustain confidence in its long-term growth potential.
Hims & Hers Health, Inc. (NYSE:HIMS) ability to demonstrate strong financial performance has also led to a bullish sentiment among many investors. Furthermore, the company’s focus on personalized health services and its ability to innovate and expand into new categories, such as diabetes management within the weight loss segment, position it well to capture unmet demand in the healthcare market.
5. Nextracker Inc. (NASDAQ:NXT)
Number of Hedge Fund Holdings: 32
Year-to-Date Performance as of January 30: 38.60%
Nextracker Inc. (NASDAQ:NXT) is a leading provider of solar tracking technology that maximizes the performance of solar panels by following the sun’s path throughout the day. The company has established itself as a key player in the industry by offering cutting-edge technologies that enhance the performance and reliability of utility-scale solar projects.
Nextracker Inc.’s (NASDAQ:NXT) stock has surged significantly year to date, driven by strong financial results and an upward revision of its fiscal year 2025 outlook. On January 28, the company reported its third-quarter 2025 earnings report, with a nearly threefold increase in profit attributable to shareholders, reaching $115.3 million compared to $41.4 million in the same period last year. While revenue declined 4.4% year-over-year to $679.4 million, the company’s results exceeded Wall Street expectations, fueled by strong demand across key regions and contributions from new product launches.
Nextracker Inc.’s (NASDAQ:NXT) order backlog, now reported to be approximately $5 billion, is supported by high demand and the successful launch of new products is also providing a strong foundation for future revenue growth. The company has revised its FY 2025 earnings guidance upward and is projecting a range of $467 million to $497 million. Adjusted earnings are now expected to be between $3.75 and $3.95 per share, well above the prior consensus estimate of $3.27.
The company’s strong performance and revised outlook have attracted favorable attention from analysts. Goldman Sachs reaffirmed its Buy rating, emphasizing the company’s continued execution and solid gross margins in the low 30% range. Barclays upgraded the stock to Overweight from Equal Weight, raising its price target from $47 to $60.
4. Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holdings: 36
Year-to-Date Performance as of January 30: 42.24%
Robinhood Markets, Inc. (NASDAQ:HOOD) is a leading financial services company that has revolutionized the way individuals invest in the stock market and engage with digital assets. The company offers a wide range of financial products, including stocks, options, cryptocurrencies, and ETFs, making it a one-stop solution for retail investors.
One of the primary drivers of Robinhood Markets, Inc.’s (NASDAQ:HOOD) stock price increase in 2025 has been the anticipation of a more favorable regulatory environment under the Trump administration. Wall Street analysts such as Gautam Chhugani from Bernstein and Michael Cyprys from Morgan Stanley have highlighted the potential for clearer rules on digital asset classification, which could allow Robinhood Markets, Inc. (NASDAQ:HOOD) to expand its crypto offerings. This includes the ability to list more tokens and capture a larger share of the spot crypto trading market. The expectation of reduced regulatory constraints is particularly significant for Robinhood Markets, Inc. (NASDAQ:HOOD), as it has been constrained in its crypto business due to the current regulatory environment. The prospect of deregulation could unlock significant growth opportunities and increase investor confidence in the company’s long-term prospects.
Robinhood Markets, Inc. (NASDAQ:HOOD) is poised to open new crypto-focused revenue streams over the next 12 months, which could significantly enhance its business model. The company is exploring opportunities in staking, stablecoin lending, and other services typically offered by crypto exchanges. These new revenue streams could diversify Robinhood Markets, Inc.’s (NASDAQ:HOOD) income sources and reduce its reliance on traditional trading fees.
3. Brinker International, Inc. (NYSE:EAT)
Number of Hedge Fund Holdings: 41
Year-to-Date Performance as of January 30: 37.95%
Brinker International, Inc. (NYSE:EAT) is a leading restaurant company headquartered in Dallas, Texas. The company operates and franchises well-known brands such as Chili’s Grill & Bar and Maggiano’s Little Italy. The company also manages virtual brands such as “It’s Just Wings”. Brinker International, Inc. (NYSE:EAT) has a strong presence in the casual dining sector, with locations across the U.S. and internationally.
One of the primary drivers of Brinker International, Inc.’s (NYSE:EAT) stock price increase year-to-date is its outstanding Q4 CY2024 performance, which significantly surpassed analyst expectations and showcased strong operational momentum. Brinker International, Inc.’s (NYSE:EAT) revenue surged 26.5% to $1.36 billion. Whereas, adjusted EBITDA reached $215.8 million, a 36.8% increase from the $157.7 million estimate, with a solid margin of 15.9%. The company has raised its full-year outlook and is now guiding revenue to $5.2 billion at the midpoint, a 10.1% increase from $4.73 billion.
Furthermore, Brinker International, Inc.’s (NYSE:EAT) strategic investments in modernizing its restaurants and expanding its footprint have also contributed to the stock’s positive performance. The company plans to open 10-12 new Chili’s Grill & Bar locations in FY2025 and is targeting both major cities and smaller markets. Additionally, Brinker International, Inc. (NYSE:EAT) has been investing heavily in technology and digital initiatives, including upgrades to online ordering systems, mobile apps, and data analytics.
2. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holdings: 52
Year-to-Date Performance as of January 30: 37.26%
Twilio Inc. (NYSE:TWLO) is a leading customer engagement and cloud communications platform that enables businesses to build, scale, and manage personalized interactions with their customers across various channels. The company provides a comprehensive suite of application programming interfaces (APIs) and software solutions, including messaging, voice, email, and user identity and authentication.
Twilio Inc.’s (NYSE:TWLO) stock surged following the release of its preliminary fourth-quarter 2024 results. The company reported an 11% year-over-year revenue growth for the quarter ended December 31, 2024. This performance is seen as a testament to the company’s ability to maintain and expand its market share in the highly competitive cloud communications and customer engagement sectors. The company also announced a positive outlook for 2025, with revenue expected to grow at 7% to 8% and generate $825 million to $850 million in free cash flow.
Furthermore, Twilio Inc. (NYSE:TWLO) is now targeting a 21% to 22% adjusted operating margin for fiscal 2027. This is a substantial increase from the 16% adjusted operating margin reported in the third quarter of 2024. The margin expansion is a result of the company’s focus on cost optimization and operational efficiency.
On January 8, Mizuho Securities upgraded Twilio Inc. (NYSE:TWLO) to Outperform from Neutral, citing the company’s improving financial performance. This upgrade, along with the positive market sentiment, has driven investor interest in Twilio Inc. (NYSE:TWLO).
1. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holdings: 78
Year-to-Date Performance as of January 30: 37.92%
Constellation Energy Corporation (NASDAQ:CEG) is a leading energy company in the United States, known for its significant role in the operation of nuclear power plants. In January, Constellation Energy Corporation (NASDAQ:CEG) reached new heights in the stock market, driven by a strategic acquisition that positions it as the largest independent power provider in the country.
The primary driver of Constellation Energy Corporation’s (NASDAQ:CEG) stock price surge is its agreement to acquire Calpine, a leading natural gas and geothermal company. This acquisition will add significant capacity to the company’s existing portfolio and increase its total generation capacity to nearly 60 GW from zero and low-emission sources. The market has responded positively to this move, with shares closing up 25.1% on the announcement day and reaching an all-time high of $310. The acquisition is expected to add $2 billion annually to Constellation Energy Corporation’s (NASDAQ:CEG) free cash flow and is expected to provide earnings per share (EPS) accretion of more than 20% in 2026 and at least $2 per share in future years.
The acquisition of Calpine will significantly expand Constellation Energy Corporation’s (NASDAQ:CEG) presence in key markets, particularly Texas and California. These regions are expected to see substantial growth in data center expansion, which will increase the demand for reliable and sustainable energy. According to Joseph Dominguez, President and Chief Executive Officer of Constellation Energy Corporation (NASDAQ:CEG) this deal represents a significant bargain as the company is paying, at a multiple of 7.9x of Calpine’s 2026 enterprise value to EBITDA.
While we acknowledge the potential of Constellation Energy Corporation (NASDAQ:CEG) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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