4 Stocks Trading Near 52-Week High With Room to Rise Further

Stocks hitting their 52-week high and delivering consistent performance offer attractive opportunities to investors while building a portfolio. This is because stocks near that level are perceived to be winners. However, stocks touching a new 52-week high are often predisposed to profit-taking, resulting in pullbacks and trend reversals. 

Moreover, given the high price, investors often wonder if the stock is overpriced. While the speculations are not absolutely baseless, all stocks hitting a 52-week high are not necessarily overpriced.

In fact, investors might lose out on top gainers in an attempt to avoid the steep prices.
 
Stocks such as Arrow Electronics ARW, IPG Photonics IPGP, Taiwan Semiconductor TSM and ATI INC ATI are expected to maintain their momentum and keep scaling new highs. Extensive information on a stock is necessary to understand whether or not there is scope for further upside.

Here, we discuss a strategy to find the right stocks. The strategy borrows from the basics of momentum investing. This technique bets on “buy high, sell higher.”

52-Week High: A Good Indicator

Many times, stocks that hit a 52-week high fail to scale higher despite having potential. This is because investors fear that the stocks are overvalued and expect the price to crash.

In fact, overvaluation is natural for most of these stocks as investors’ focus (or willingness to pay a premium) has helped them reach the level. But that does not always indicate an impending decline. Factors such as robust sales, surging profit levels, earnings growth prospects and strategic acquisitions that encourage investors to bet on these stocks could keep them motivated if there is no tangible negative. In other words, the momentum might continue.

Also, when a string of positive developments dominates the market, investors find their underreaction unwarranted, even if there are no company-specific driving forces.

Setting the Right Filters

We ran a screen to zero in on 52-week high stocks (trading near the high level) that hold tremendous upside potential. The screen includes parameters to shortlist stocks with strong earnings growth expectations, sturdy value metrics and price momentum.

Moreover, the screen filters stocks that are relatively undervalued compared to their peers in terms of earnings as well as sales, ensuring the continuation of their rally for some time.

Current Price/52 Week High >= .8: This is the ratio between the current price and the highest price at which the stock has traded in the past 52 weeks. A value greater than 0.8 implies that the stock is trading within 20% of its 52-week high range.

% Change Price – 4 Weeks > 0: It ensures that the stock price has moved north over the past four weeks.

% Change Price – 12 Weeks > 0: This metric guarantees a continued upward price momentum for the stock over the past three months as well.

Price/Sales <= XIndMed: The lower, the better.

P/E using F(1) Estimate <= XIndMed: This metric measures the amount an investor puts into a company to obtain one dollar of earnings. It narrows down the list of stocks to those that are undervalued compared to the industry.

One-Year EPS Growth F(1)/F(0) >= XIndMed: This helps choose stocks that have higher growth rates than the industry. This is a meaningful indicator, as decent earnings growth adds to investor optimism.

Zacks Rank <=2: No screening is complete without the Zacks Rank, which has proved its worth since its inception. It is a fundamental truth that stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy) have always managed to brave adversities and beat the market average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Current Price >= 8: This parameter will help screen stocks that are trading at $8 or higher.

Volume – 20 days (shares) >= 100000: The inclusion of this metric ensures that there is a substantial volume of shares, so trading is easier.

Here we present four stocks, each sporting a Zacks Rank #1, out of the 16 stocks that made it through the screen:

Arrow Electronics has demonstrated compelling momentum entering 2026, evidenced by robust fourth-quarter performance, with sales surging 20% to $8.7 billion. The company reported continued acceleration across both Global Components and Enterprise Computing Solutions, driven by strengthening demand in cloud infrastructure, artificial intelligence deployment, and datacenter expansion. Full-year 2025 sales reached $30.9 billion, reflecting disciplined execution and strategic positioning in high-growth technology sectors.

Recent partnerships underscore Arrow's innovation leadership, including collaboration with .lumen to scale production of AI-powered assistive technology for the visually impaired. Recognition as Fortune's Most Admired Company for the 26th consecutive year validates operational excellence and financial soundness. The company rides on positive cyclical tailwinds, improving leading indicators across key markets, and strong performance in value-added offerings that enhance competitive differentiation and margin potential.

The Zacks Consensus Estimate for ARW’s 2026 earnings has moved north by 10.3% to $13.08 per share in the past 60 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 17.88%.

IPG Photonics is well-positioned for strong growth in 2026 through strategic expansion into high-margin defense applications alongside core industrial laser innovation. Recent product launches demonstrate technological leadership across multiple verticals. The January Photonics West showcase highlighted breakthrough innovations, including award-nominated 8 kW single-mode lasers, advanced nanosecond cleaning systems, and medical laser platforms addressing expanding market opportunities. February's Singapore Airshow debut of the CROSSBOW MINI high-energy laser system positions IPG in the rapidly growing counter-drone defense market. 

The Huntsville manufacturing facility provides domestic production capacity for defense customers requiring rapid scaling. This diversification into directed-energy defense applications complements IPG's industrial laser strength, creating multiple revenue drivers while leveraging existing manufacturing expertise and fiber laser technology leadership across commercial and defense sectors.

The Zacks Consensus Estimate for IPGP’s 2026 earnings has moved north by 6.1% to $1.21 per share in the past 60 days. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average surprise being 89.09%.

Taiwan Semiconductor demonstrates compelling fundamental strength. January revenues surged 36.8% year over year, reflecting robust demand for advanced semiconductors. Leading-edge technologies drive profitability, with 3-nanometer and 5-nanometer processes representing over 60% of total wafer revenues while gross margins expand toward 63-65%. The company's $52-56 billion capital expenditure plan for 2026 positions it to capture accelerating AI and high-performance computing demand.

Its fourth-quarter results showcased 35% net income growth, underscoring operational leverage from premium node transitions. Sequential revenue momentum continues with first-quarter guidance indicating sustained strength. The foundry's technological leadership in advanced process nodes, combined with expanding production capacity and improving profitability metrics, creates multiple fundamental catalysts. Strong customer demand for cutting-edge manufacturing capabilities supports the positive revenue trajectory throughout 2026.

The Zacks Consensus Estimate for TSM’s 2026 earnings has moved north by 15.7% to $14.11 per share in the past 60 days. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.09%.

ATI INC began 2026 with compelling fundamental momentum following its February earnings announcement. The specialty materials producer achieved record annual revenues of $4.6 billion in 2025, demonstrating strong execution across aerospace and defense markets that now comprise over 70% of the revenue mix. The company announced significant capacity investments in proprietary nickel melt systems, targeting $350 million in incremental revenues by mid-2028 through customer-funded partnerships.

Recent market share gains span jet engines, defense programs, and specialty energy sectors, positioning ATI to capitalize on accelerating commercial aerospace production ramps and expanding defense opportunities. With mid-teens growth projected in jet engines and operational efficiencies from modernized melting infrastructure, ATI's differentiated materials portfolio and contractual partnerships provide a robust foundation for sustained profitable growth throughout 2026.

The Zacks Consensus Estimate for ATI’s 2026 earnings has moved north by 4.3% to $4.12 per share in the past 60 days. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.19%.

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This article originally published on Zacks Investment Research (zacks.com).

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