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The markets experienced significant volatility this week, with stock indexes dropping as much as 5% from their recent highs in rapid fashion. While these sharp price moves rattled some investors, they might actually be the holiday gift savvy buyers didn’t know they needed.

On Wednesday, Fed Chair Jerome Powell delivered a notably hawkish press conference, dampening hopes for multiple rate cuts in 2025 as he expressed concern over rising inflation.

However, Friday's updated PCE inflation data, the Fed’s preferred gauge of price changes, painted a more optimistic picture. Both headline and core PCE rose just 0.1% in November, coming in below expectations and suggesting inflation pressures may be easing. After falling sharply in early trading, stocks rebounded aggressively, as they showed signs of a potential bottom in prices.

Palantir Technologies (PLTR - Free Report), Tesla (TSLA - Free Report), and Vertiv (VRT - Free Report) are three of the most exciting companies in the market at the moment, and all they have recently displayed impressive momentum and while maintaining top Zacks Ranks ratings.

When buying dips in the market, looking for stocks that have been showing relative strength can often be an effective way to pick winners. Here, I will share some of the bullish catalysts going forward and detail the technical trading setups in each stock.

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Tesla: Musk’s Influence Drives Stock Higher

Tesla’s stock has continued to soar, thanks in part to the outsized influence of its CEO, Elon Musk. Recently, Musk’s involvement in political and economic discussions—most notably his support in helping Donald Trump get elected—has only amplified his already significant impact on Tesla’s brand and stock price. As Tesla's business outlook improves, Musk's influence on both public opinion and policy appears stronger than ever, creating a favorable narrative around the company.

Despite its rich valuation, Tesla often operates in cycles of boom and bust, and it is currently in a booming phase. Investors have been rallying behind the stock, buoyed by expectations of continued innovation, market expansion, and robust financial performance.

Reflecting this optimism, analysts have raised earnings estimates considerably, propelling the stock to a Zacks Rank #1 (Strong Buy) rating. Over the last 60 days, estimates have climbed by as much as 15%, with the company expected to deliver impressive annual EPS growth of 20.25% over the next three to five years.

The technical setup in the stock is also quite compelling as it has quickly risen to one of the market’s clear relative leaders. After rallying rigorously from a technical pattern a couple of weeks ago, the stock has consolidated again, forming a descending wedge pattern. If the stock can breakout above the $443 level, it should begin another rally.

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Vertiv: Leading Data Infrastructure Boosts Shares

Vertiv continues to stand out as a premier way for investors to gain exposure to the ever-growing trend of data and internet infrastructure. As the global economy becomes increasingly digitized, Vertiv’s role in supporting critical infrastructure for data centers, cloud computing, and AI-driven technologies makes it a key player in this secular megatrend. The company’s products and solutions are essential for enabling the rapid expansion of these industries, placing Vertiv at the forefront of technological innovation.

Despite its strong performance throughout the year, Vertiv’s outlook keeps improving. It has consistently held a top Zacks Rank, and analysts have continued to upgrade their earnings expectations across all timeframes.

Over the last 60 days, estimates have been unanimously revised higher, reflecting strong confidence in the company’s trajectory and earning it a Zacks Rank #1 (Strong Buy) rating. Looking ahead, Vertiv’s earnings are projected to grow at a remarkable annual rate of 36.2% over the next three to five years, highlighting its potential for sustained outperformance in the evolving digital economy.

Vertiv also has a convincing technical pattern forming on the chart. The stock has been consolidating for nearly a month now, and it appeared to be on the verge of breaking out on Friday. If the price can clear the $121 level, it should begin another bull phase.

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Palantir Technologies: Strongest Stock Poised to Break Out

Palantir Technologies is making a strong case for being the stock of the year, with its surging stock price and growing popularity among investors. Under the leadership of visionary CEO Alex Karp, Palantir has developed a cutting-edge platform that integrates advanced AI capabilities with robust data analytics solutions.

This has positioned the company as an indispensable partner for major government contracts and a wide range of private-sector clients, further solidifying its reputation as a leader in the data-driven technology space.

Palantir currently holds a Zacks Rank #2 (Buy) rating, with analysts remaining overwhelmingly positive about its future prospects. Over the past 60 days, only one analyst has revised estimates downward, which is a testament to the company’s strong fundamentals and market position.

While Palantir’s valuation is undeniably rich, its growth trajectory and growing entrenchment may justify the premium. The company is expected to achieve an impressive 36.1% annual earnings growth over the next three to five years, driven by expanding adoption of its AI-enabled platforms and increasing demand for data-driven decision-making across industries.

Palantir Technologies’ technical pattern may be the most compelling of the group shared here. It is among the market’s leadership, and the stock appeared to be forming a convincing bull flag on Friday. The stock has been breaking out from this consolidation, and if it can close above this level, such a move would signal the start of another big rally.

Image Source: TradingView

Should Investors Buy Shares in Vertiv, Tesla, and Palantir?

Given the recent market dynamics, all three stocks—Vertiv, Tesla, and Palantir Technologies—may present compelling opportunities for investors looking to capitalize on relative strength and secular growth trends. Each company is uniquely positioned in its respective industry to benefit from transformative forces shaping the economy, from digitization and data infrastructure to electric vehicles and AI-driven innovation.

Investors should carefully weigh the risks of investing in stocks with rich valuations, strong momentum, and the volatility that comes with it against their long-term growth potential. For those seeking exposure to cutting-edge innovation and sustained momentum, these three stocks stand out as some of the best options available.

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