Three Momentum Stocks to Buy as Market Rally Gains Traction
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 16 2026
0mins
Source: NASDAQ.COM
- Market Rally Momentum: The U.S. equity markets experienced a strong rally this week, driven by optimism surrounding a potential truce deal between the U.S. and Iran, bringing benchmark indices close to all-time highs and erasing losses from the Iran conflict, indicating increased investor confidence in future market conditions.
- Momentum Investment Strategy: Investors are shifting towards momentum stocks like Five Below, Permian Resources, and Alcoa when value or growth investing fails to yield desired profits, leveraging the adage 'the trend is your friend' to capitalize on prevailing market trends for sustained gains.
- Five Below Performance: Targeting the teenage market, Five Below's stock surged 250.8% over the past year, despite a 2.9% decline in the past week, with a Momentum Score of A indicating robust market performance and potential for future growth.
- Permian Resources and Alcoa: Permian Resources' stock rose 81.6% over the past year but fell 6.5% in the last week, while Alcoa's stock surged 191.1% but dropped 1.5% recently, with Momentum Scores of B and A respectively, highlighting their market potential.
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Analyst Views on AA
Wall Street analysts forecast AA stock price to fall
8 Analyst Rating
2 Buy
4 Hold
2 Sell
Hold
Current: 68.980
Low
38.00
Averages
57.63
High
78.00
Current: 68.980
Low
38.00
Averages
57.63
High
78.00
About AA
Alcoa Corporation is a vertically integrated aluminum company comprised of bauxite mining, alumina refining, aluminum production (smelting and casting), and energy generation. The Company's operations are comprised of two business segments: Alumina and Aluminum. The Alumina segment primarily consists of its bauxite mines and alumina refineries, and its operations include the mining of bauxite and other aluminous ores, as well as the refining, production, and sale of smelter grade and non-metallurgical alumina. The alumina produced by this segment is sold primarily to internal and external aluminum smelter customers; a portion of the alumina is sold to external customers who process it into industrial chemical products. The Aluminum segment consists of the Company's aluminum smelting and casting operations along with the Company's energy production assets in Brazil, Canada, and the United States. It has direct and indirect ownership of over 25 operating locations across eight countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Alcoa's Alumina Segment Faces $60M Hit
- Rising Production Costs: Alcoa's alumina segment is expected to incur a $60 million hit primarily due to a $30 million increase in production costs at the Pinjarra refinery, which is facing ongoing instability from Cyclone Narelle, highlighting the dual pressures of climate instability and rising energy prices.
- Declining Alumina Shipments: The company anticipates a reduction of 120,000 metric tons in third-party alumina shipments for Q2 due to decreased output capacity at the Pinjarra refinery, which will further exacerbate revenue pressures and impact overall performance.
- Improved Aluminum Outlook: Despite challenges in the alumina segment, Alcoa's aluminum business is projected to swing favorably by approximately $55 million, primarily due to inventory repositioning actions and higher shipment volumes, demonstrating the company's resilience in the aluminum market.
- Bearish Market Sentiment: Although Alcoa's stock has gained over 18% this year, retail sentiment on Stocktwits remains bearish, reflecting concerns about the company's future performance amid high message volumes in the past 24 hours.
See More
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- EchoStar Stock Rise: EchoStar's shares gained more than 8% ahead of SpaceX's IPO on Friday, reflecting market optimism regarding its stake in SpaceX shares and potential future gains.
- General Dynamics Upgrade: General Dynamics saw its shares increase nearly 5% after Jefferies upgraded its rating to buy, citing significant returns on investments and continued strength in near-term results, with a new price target of $400 implying a 17% upside.
- Adobe Stock Decline: Adobe's shares fell nearly 5%, hitting a new 52-week low, despite analysts expecting its earnings report to align with prior guidance, indicating ongoing market concerns about its future performance.
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- Oracle Financing Plans: Oracle announced plans to raise an additional $20 billion in equity and debt for its AI initiatives, leading to an 8% drop in shares despite beating revenue and earnings expectations for the quarter.
- Chip Equipment Stocks Rise: Oracle's increased capital expenditure plans positively impacted chip equipment stocks, with Applied Materials and Lam Research both climbing nearly 5%, KLA rising 4%, and ASML Holding gaining over 3%.
- Navan Stock Surge: Navan's stock jumped 19% after guiding for second-quarter and full-year revenue above FactSet forecasts, alongside a first-quarter non-GAAP earnings and revenue beat.
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Alcoa Faces Major Pressure in Alumina Segment Amid Energy Disruptions
- Alumina Segment Loss: Alcoa expects its alumina segment to incur a $60 million hit in Q2 due to energy disruptions, with CFO Molly Beerman stating that the segment will be underwater, highlighting the company's vulnerability in the current market environment.
- Rising Cost Factors: The loss is primarily attributed to $30 million in higher production costs at the Pinjarra refinery due to Cyclone Narelle's impact, along with $20 million in increased fuel oil and diesel prices linked to the Middle East conflict, reflecting the direct impact of external conditions on operations.
- Market Dependency: The alumina segment contributed nearly half of Alcoa's adjusted EBITDA in FY 2025, yet the soaring aluminum prices have placed dual pressure on profitability, especially as global alumina supply chains are affected by geopolitical risks.
- Supply Chain Vulnerability: Alcoa's alumina refineries typically ship raw materials to aluminum smelters in the Persian Gulf, but surging fuel and electricity prices due to the conflict have significantly increased operational costs, further exacerbating the company's competitive disadvantage in the global market.
See More
Valuation Grades Highlight Expensive Materials Stocks
- Valuation Overview: A screen of materials stocks with market capitalizations above $10 billion reveals that Coeur Mining (CDE), Ecolab (ECL), and Element Solutions (ESI) are among the most expensive, each receiving an F valuation grade, indicating significant valuation risk compared to peers.
- Valuation Criteria: The grades are based on a combination of valuation metrics such as P/E, PEG, price to sales, and price to cash flow, reflecting how attractively these stocks are priced under current and forward estimates, suggesting caution for investors.
- Market Performance Insight: The F grades for Coeur Mining, Ecolab, and Element Solutions imply that their market performance may be constrained, prompting investors to consider the potential downside risks associated with their high valuations when making investment decisions.
- Industry Implications: As market scrutiny on materials stocks intensifies, particularly amid rising economic uncertainty, investors may reassess the investment value of these high-valuation stocks, potentially impacting overall market sentiment and capital flows.
See More
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- AI Investment Opportunities: Joe Terranova highlighted on CNBC that both Twilio and Generac are showing strong growth potential amid the AI surge, with Twilio's stock up about 60% year-to-date and Generac's stock having more than doubled, indicating robust fundamentals and market momentum.
- Technical Analysis Support: Terranova also mentioned Starbucks' technical performance, noting that while its stock has risen nearly 14% year-to-date, it has dropped almost 10% in the past month, currently finding support near the 200-day moving average, which may present a buying opportunity for investors.
- Retail Stock Performance: Investor Brian Belski recently purchased Dick's Sporting Goods and Academy Sports, with the former performing well due to its integration with Foot Locker; however, both stocks have underperformed the S&P 500 year-to-date, with Dick's stock up nearly 9%.
- Travel and Energy Investments: Belski also invested in American Airlines and Hyatt Hotels, the latter being a standout performer in the hotel sector and considered under-owned by institutions, while he pointed out Eversource Energy as an AI-related investment opportunity offering nearly a 5% dividend yield.
See More
Alcoa's Alumina Segment Faces $60M Hit
- Rising Production Costs: Alcoa's alumina segment is expected to incur a $60 million hit primarily due to a $30 million increase in production costs at the Pinjarra refinery, which is facing ongoing instability from Cyclone Narelle, highlighting the dual pressures of climate instability and rising energy prices.
- Declining Alumina Shipments: The company anticipates a reduction of 120,000 metric tons in third-party alumina shipments for Q2 due to decreased output capacity at the Pinjarra refinery, which will further exacerbate revenue pressures and impact overall performance.
- Improved Aluminum Outlook: Despite challenges in the alumina segment, Alcoa's aluminum business is projected to swing favorably by approximately $55 million, primarily due to inventory repositioning actions and higher shipment volumes, demonstrating the company's resilience in the aluminum market.
- Bearish Market Sentiment: Although Alcoa's stock has gained over 18% this year, retail sentiment on Stocktwits remains bearish, reflecting concerns about the company's future performance amid high message volumes in the past 24 hours.
See More
Viasat Shares Surge After U.S. Space Force Contract Win
- Viasat Contract Approval: Viasat's shares surged over 8% following the U.S. Space Force's award of a multi-year contract for a dual-band satellite system, which is expected to enhance the company's market position in military communications.
- EchoStar Stock Rise: EchoStar's shares gained more than 8% ahead of SpaceX's IPO on Friday, reflecting market optimism regarding its stake in SpaceX shares and potential future gains.
- General Dynamics Upgrade: General Dynamics saw its shares increase nearly 5% after Jefferies upgraded its rating to buy, citing significant returns on investments and continued strength in near-term results, with a new price target of $400 implying a 17% upside.
- Adobe Stock Decline: Adobe's shares fell nearly 5%, hitting a new 52-week low, despite analysts expecting its earnings report to align with prior guidance, indicating ongoing market concerns about its future performance.
See More
Intel Upgraded to Buy, Shares Surge Nearly 5%
- Intel Upgrade: Bank of America upgraded Intel from underperform to buy, citing rising demand for central processing units and a focus on agentic artificial intelligence, resulting in a nearly 5% share price increase.
- Oracle Financing Plans: Oracle announced plans to raise an additional $20 billion in equity and debt for its AI initiatives, leading to an 8% drop in shares despite beating revenue and earnings expectations for the quarter.
- Chip Equipment Stocks Rise: Oracle's increased capital expenditure plans positively impacted chip equipment stocks, with Applied Materials and Lam Research both climbing nearly 5%, KLA rising 4%, and ASML Holding gaining over 3%.
- Navan Stock Surge: Navan's stock jumped 19% after guiding for second-quarter and full-year revenue above FactSet forecasts, alongside a first-quarter non-GAAP earnings and revenue beat.
See More
Alcoa Faces Major Pressure in Alumina Segment Amid Energy Disruptions
- Alumina Segment Loss: Alcoa expects its alumina segment to incur a $60 million hit in Q2 due to energy disruptions, with CFO Molly Beerman stating that the segment will be underwater, highlighting the company's vulnerability in the current market environment.
- Rising Cost Factors: The loss is primarily attributed to $30 million in higher production costs at the Pinjarra refinery due to Cyclone Narelle's impact, along with $20 million in increased fuel oil and diesel prices linked to the Middle East conflict, reflecting the direct impact of external conditions on operations.
- Market Dependency: The alumina segment contributed nearly half of Alcoa's adjusted EBITDA in FY 2025, yet the soaring aluminum prices have placed dual pressure on profitability, especially as global alumina supply chains are affected by geopolitical risks.
- Supply Chain Vulnerability: Alcoa's alumina refineries typically ship raw materials to aluminum smelters in the Persian Gulf, but surging fuel and electricity prices due to the conflict have significantly increased operational costs, further exacerbating the company's competitive disadvantage in the global market.
See More
Valuation Grades Highlight Expensive Materials Stocks
- Valuation Overview: A screen of materials stocks with market capitalizations above $10 billion reveals that Coeur Mining (CDE), Ecolab (ECL), and Element Solutions (ESI) are among the most expensive, each receiving an F valuation grade, indicating significant valuation risk compared to peers.
- Valuation Criteria: The grades are based on a combination of valuation metrics such as P/E, PEG, price to sales, and price to cash flow, reflecting how attractively these stocks are priced under current and forward estimates, suggesting caution for investors.
- Market Performance Insight: The F grades for Coeur Mining, Ecolab, and Element Solutions imply that their market performance may be constrained, prompting investors to consider the potential downside risks associated with their high valuations when making investment decisions.
- Industry Implications: As market scrutiny on materials stocks intensifies, particularly amid rising economic uncertainty, investors may reassess the investment value of these high-valuation stocks, potentially impacting overall market sentiment and capital flows.
See More
Investors Favor Twilio and Generac Amid AI Surge
- AI Investment Opportunities: Joe Terranova highlighted on CNBC that both Twilio and Generac are showing strong growth potential amid the AI surge, with Twilio's stock up about 60% year-to-date and Generac's stock having more than doubled, indicating robust fundamentals and market momentum.
- Technical Analysis Support: Terranova also mentioned Starbucks' technical performance, noting that while its stock has risen nearly 14% year-to-date, it has dropped almost 10% in the past month, currently finding support near the 200-day moving average, which may present a buying opportunity for investors.
- Retail Stock Performance: Investor Brian Belski recently purchased Dick's Sporting Goods and Academy Sports, with the former performing well due to its integration with Foot Locker; however, both stocks have underperformed the S&P 500 year-to-date, with Dick's stock up nearly 9%.
- Travel and Energy Investments: Belski also invested in American Airlines and Hyatt Hotels, the latter being a standout performer in the hotel sector and considered under-owned by institutions, while he pointed out Eversource Energy as an AI-related investment opportunity offering nearly a 5% dividend yield.
See More
