The stock market has been on fire, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all posting impressive gains over the past year. But with some individual stocks outperforming even these indices, investors are left wondering if these three hot stocks are too hot to touch.
First up is Amazon, which has seen its stock price surge 45% over the past year. Analysts believe the company’s earnings could grow by an average of 30% annually for the next three to five years, making its current valuation of 39 times earnings look like a bargain. With a culture of relentless investment in growth and a track record of success, Amazon may still have room to run for long-term investors.
Next, CrowdStrike has seen its stock price rise 151% over the last year as it capitalizes on the AI boom in cybersecurity. The company’s Falcon platform and AI-native defense capabilities have positioned it as a leader in endpoint security. However, with a price-to-sales ratio of 29, well above the industry average, investors may want to wait for a better entry point before jumping in.
Finally, Nvidia has seen its stock price climb a staggering 226% over the past year, making it the world’s most valuable company. With revenue estimates continuing to soar and the company at the forefront of the AI revolution, Nvidia’s high valuation may still be justified for long-term investors who believe in the future of AI technology.
While these three stocks have been on a tear, investors should carefully consider their risk tolerance and investment goals before jumping in. With the stock market red-hot, it’s important to approach these hot stocks with caution to avoid getting burned.
