5 Momentum Picks for Third-Quarter 2025 After a Stellar Second Quarter

Wall Street closed at a record-high level despite facing a turbulent first half of 2025. The second quarter of 2025 was the best quarter for U.S. stocks over the past year. Major stock index — the Dow, the S&P 500 and the Nasdaq Composite — surged 5%, 10.6% and 17.8%, respectively. In addition, the small-cap benchmark — the Russell 2000 — also gained 8.3%. 

Expectations of key trade deals and evaporation of worries of a near-term recession in the U.S. economy boosted market participants sentiments. The Fed also indicated two more cuts in the benchmark lending rate in the second half of this year.

At this stage, it will be prudent to invest in stocks with a favorable Zacks Rank that have momentum in the third quarter. Five such stocks are: Jabil Inc. JBL, Newmont Corp. NEM, HEICO Corp. HEI, Rockwell Automation Inc. ROK and The Estée Lauder Companies Inc. EL. Each of the stocks sports a Zacks Rank #1 (Strong Buy) at present and has a Zacks Momentum Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks in the past month.

Jabil Inc. 

Jabil has been benefiting immensely from healthy momentum in capital equipment, AI-powered data center infrastructure, cloud, and digital commerce business verticals. Its focus on end-market and product diversification is a key catalyst. Jabil’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. 

JBL’s high free cash flow indicates efficient financial management practices, optimum utilization of assets, and improved operational efficiency. Massive application of generative AI is set to drastically increase the efficiency of JBL’s automated optical inspection machines for the automation industry. A large-scale portfolio of business sectors offers JBL a high degree of resiliency during times of macroeconomic and geopolitical disruption.

Jabil has an expected revenue and earnings growth rate of 5.9% and 18.5%, respectively, for next year (ending August 2026). The Zacks Consensus Estimate for next-year earnings has improved 9% over the last 30 days.

Newmont Corp.

Newmont is making notable progress with its growth projects. NEM is likely to gain from several projects, including the Tanami expansion. The acquisition of Newcrest also created an industry-leading portfolio providing opportunities for significant synergies. Moreover, NEM remains focused on improving operational efficiency and returning value to its shareholders.

Newmont has received full funds approval for its Ahafo North project, which has reached the execution stage. Commercial production for the project is expected to commence in second-half 2025. NEM remains committed to Ghana, investing $950 million to $1,050 million in development capital for Ahafo North. 

Newmont has an expected revenue and earnings growth rate of 2% and 24.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 30 days.

HEICO Corp.

HEICO has been witnessing increased orders for its aftermarket replacement parts and repair and overhaul parts services, backed by rising air travel. With its Flight Support Group unit being a supplier of military aircraft parts, solid U.S. defense funding should bolster order flows for HEI’s defense products. 

To this end, it is imperative to mention that a White House report from May 2025 stated that President Trump has requested a 13% increase in the nation's defense budget to $1.01 trillion for fiscal 2026. Such solid defense funding should usher in strong order flows for HEI’s defense products, thereby boosting its revenue-generation prospects.

HEICO has an expected revenue and earnings growth rate of 13.2% and 23.4%, respectively, for the current year (ending October 2025). The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the last 30 days.

Rockwell Automation Inc.

Rockwell Automation is poised to benefit from broadening its portfolio of hardware and software products, solutions, and services. ROK is also gaining traction from its investments in the cloud. Investments made by ROK across various end markets, coupled with increased automation and digital transformation, will support the company in the coming quarters. 

Although ROK is witnessing lower sales volumes across all segments, this will be offset by its price increase actions. ROK’s solid and flexible balance sheet will mitigate the negative impacts of the contraction in manufacturing activity in recent months. Recent acquisitions will boost ROK’s performance in the upcoming quarters.

Rockwell Automation has an expected revenue and earnings growth rate of 6.7% and 16.1%, respectively, for next year (ending September 2026). The Zacks Consensus Estimate for next-year earnings has improved 0.3% over the last seven days.

The Estée Lauder Companies Inc.

The Estée Lauder Companies is focused on rebuilding profitability through its expanded Profit Recovery and Growth Plan, aiming to accelerate sales growth and restore margins. EL’s “Beauty Reimagined” is gaining traction, with a focus on innovation, expansion in digital platforms and increased consumer-facing investments. 

EL is streamlining operations and enhancing efficiencies through procurement and outsourcing initiatives. EL has a strong online business, which is likely to be a major growth engine for the upcoming few years. EL has spread its presence online to about 50 markets. 

EL has been implementing new technology and digital experiences, including online booking for each store appointment, omni-channel loyalty programs and high-touch mobile services. These initiatives and EL’s digital-first mindset have been aiding its online sales.

The Estée Lauder Companies has an expected revenue and earnings growth rate of 1.2% and 45.4%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 30 days.

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

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