Momentum Stocks That Crushed the S&P 500 This Year

The S&P 500’s advance has been broad, but a distinct cohort of momentum stocks has left the index in the dust. These are not merely high-beta names that rose with the tide. They are companies that delivered accelerating revenue, expanding margins, upward analyst revisions, and institutional accumulation—the four pillars of durable momentum. Below, we dissect the standout performers, the catalysts behind their outperformance, and the quantitative fingerprints that signal whether their momentum can persist.

NVIDIA (NVDA): The AI Infrastructure Supercycle

NVIDIA has been the single most dominant momentum stock in the S&P 500 for consecutive years, and this year was no exception. The company’s data center segment, driven by H100 and Blackwell GPU demand, grew triple digits year over year. What separates NVDA from a cyclical chip rally is the visibility of its order book. Hyperscalers—Microsoft, Amazon, Google, Meta—collectively committed tens of billions in capital expenditure explicitly tied to AI training and inference. NVIDIA’s gross margin expanded beyond 75%, a level unprecedented for a semiconductor hardware company. Relative strength has stayed above 90 for most of the year, and institutional ownership increased every quarter. The risk is concentration: any slowdown in cloud capex would compress the multiple. But momentum investors care about the trend, not the terminal value, and NVDA’s trend remained intact.

Meta Platforms (META): The Efficiency and Buyback Engine

Meta entered the year with a battered multiple after the metaverse spending backlash. It exited as a momentum leader. The catalyst was ruthless cost discipline—headcount reductions, infrastructure optimization, and a pivot to AI-driven ad ranking. Revenue reaccelerated from negative growth to double-digit gains. Operating margin climbed above 40%. The company authorized a $50 billion buyback and initiated a dividend. Momentum quant models flagged META when its 50-day moving average crossed decisively above its 200-day, accompanied by volume expansion. The stock’s beta to the Nasdaq was high, but its earnings revisions were higher. Short interest collapsed, and options skew flipped bullish. Meta proved that momentum can emerge from a value base when fundamentals inflect.

Broadcom (AVGO): Custom Silicon and VMware Integration

Broadcom’s momentum story is two-pronged. First, its custom ASIC business—designing chips for Google’s TPUs, Meta’s accelerators, and TikTok’s inference workloads—grew faster than the overall AI semiconductor market. Second, the VMware acquisition, initially feared as a value trap, became accretive ahead of schedule. Broadcom raised guidance twice, citing enterprise software renewals and cross-selling into its networking customer base. The stock’s relative strength line broke to new highs in the spring and never looked back. Free cash flow yield remained above 4%, allowing aggressive debt paydown and dividend increases. Momentum investors favor AVGO because it combines AI upside with recurring software revenue—a rare pairing.

Eli Lilly (LLY): GLP-1 Dominance

Healthcare rarely produces momentum stocks of this magnitude, but Eli Lilly did. Tirzepatide (Mounjaro, Zepbound) became the fastest-growing drug franchise in pharmaceutical history. Revenue from GLP-1 agonists tripled year over year. Lilly’s manufacturing capacity expansion—billions invested in new plants—signaled confidence in demand visibility through the decade. The stock’s price-to-earnings ratio expanded to 60x forward, but earnings growth outpaced multiple expansion. Momentum screens flagged LLY due to persistent positive earnings surprises: four consecutive quarters of beats above 20%. The company also benefited from a rotation into defensive growth as investors sought non-tech momentum. Relative strength stayed above 95 for months. The risk is pricing pressure from insurers and compounded alternatives, but Lilly’s patent moat and clinical pipeline kept the momentum intact.

JPMorgan Chase (JPM): The Bank That Acted Like a Tech Stock

JPMorgan crushed the S&P 500 not by taking excessive risk, but by executing flawlessly in a higher-for-longer rate environment. Net interest income surged as loan yields repriced faster than deposit costs. Investment banking fees rebounded as capital markets reopened. The company raised its 2024 net interest income guidance twice. What made JPM a momentum stock was its relative strength versus the financial sector and the S&P 500. Its 50-day moving average stayed above the 200-day for the entire year. Institutional investors treated JPM as a safe haven with growth optionality—a rare combination. The bank’s fortress balance sheet allowed it to buy back stock aggressively while peers retrenched. Momentum quant models rarely flag banks, but JPM’s earnings revision breadth was among the highest in the index.

GE Aerospace (GE): The Industrial Turnaround

General Electric’s transformation into GE Aerospace was completed this year, and the market rewarded it. The company’s aviation aftermarket business—engine repairs, parts, and services—grew double digits as global air travel exceeded pre-pandemic levels. Long-term service agreements provided predictable cash flows. GE raised full-year guidance three times. The stock’s momentum was fueled by multiple expansion and earnings beats. Short interest was negligible. The relative strength line broke out of a multi-year base, a classic momentum entry signal. GE’s success shows that spin-offs and pure-plays can generate sustained momentum when management credibility is high and end markets are cyclical but strong.

Uber Technologies (UBER): Free Cash Flow Inflection

Uber’s momentum came from a simple metric: free cash flow. After years of burning cash, Uber generated billions in FCF, enabling its first buyback. Gross bookings grew 20% year over year, driven by mobility and delivery. Advertising revenue on the Uber Eats platform grew even faster. The stock’s inclusion in the S&P 500 earlier in the year forced index funds to buy, adding mechanical momentum. But the fundamental catalyst was margin expansion: adjusted EBITDA margin doubled. Momentum investors noted that Uber’s relative strength broke above 80 and stayed there. Analyst revisions turned uniformly positive. The bear case—driver classification and autonomous vehicle disruption—faded as Uber signed partnerships with AV companies rather than competing with them.

How to Identify the Next Momentum Leader

Momentum is not just price. The stocks above share specific traits: (1) revenue growth accelerating for at least two quarters; (2) gross margin expansion; (3) positive earnings estimate revisions from at least three analysts; (4) relative strength above 80 for three months; (5) institutional ownership increasing; and (6) short interest below 5% of float. Screening for these factors narrows thousands of stocks to a handful. The S&P 500’s momentum leaders this year all passed at least five of these six filters before their major moves.

Sector Rotation and Momentum Persistence

Momentum crashes happen when leadership narrows too much. This year, leadership was broad within AI infrastructure, GLP-1 healthcare, and select financials. That breadth reduced crash risk. However, momentum investors must monitor the 200-day moving average of the equal-weight S&P 500 versus the cap-weight index. When cap-weight outperforms equal-weight by a wide margin, momentum is concentrated. This year, that spread widened, but not to extreme levels. The implication: momentum remained investable, but with tighter stops.

Volatility and Position Sizing

Momentum stocks exhibit higher realized volatility than the S&P 500. NVDA’s 30-day implied volatility averaged 50%; LLY’s averaged 35%. To match index risk, momentum investors must size positions smaller. A common rule: allocate half the capital to a momentum stock as you would to a low-volatility index fund. Stop-losses should be set at 1.5x average true range below the entry price. This prevents a single momentum reversal from erasing gains from other winners.

Earnings Gaps and Momentum Acceleration

Every major momentum stock this year had at least one earnings gap up of 10% or more. These gaps signal institutional conviction. The pattern: stock gaps up, consolidates for two to four weeks, then breaks higher. Momentum traders call this a “high tight flag.” NVDA had three such patterns. META had two. LLY had two. Recognizing this pattern allows entry after the gap but before the next leg up. Volume must confirm: gap-up days should see 200% or more of average daily volume.

The Role of Passive Flows

S&P 500 inclusion forces passive funds to buy. Uber and GE Aerospace (post-spinoff) benefited. But passive flows are a double-edged sword: when a momentum stock is removed from the index, forced selling occurs. Momentum investors should track index committee announcements. However, the stocks in this article remain in the index. Their momentum is driven by active flows—hedge funds, mutual funds, and retail—not just passive.

Final Quantitative Check: Relative Strength vs. S&P 500

To verify that a momentum stock is truly crushing the S&P 500, calculate its relative strength ratio: stock price divided by S&P 500 price. Plot a 50-day moving average of that ratio. If the ratio’s 50-day MA is rising and above its 200-day MA, the stock is outperforming. Every stock mentioned above passed this test for at least six consecutive months. That is the definition of momentum leadership. When the ratio’s 50-day MA crosses below the 200-day, momentum is broken. Exit. No exceptions.