Stocks rallied Thursday on hopes that the Federal Reserve will cut interest rates next month.
The S&P 500 climbed 1% to a record close at 2,954.18. The Nasdaq gained 0.8% to 8,051.34. And the Dow rose nearly 250 points to 26,753.17
But while many boats are rising, there are a few stocks hitting new highs that traders say could continue to surge higher.
Microsoft (NASDAQ: MSFT) closed today at an all-time high of $136.95, and recurring revenue from the company’s subscription services should keep the stock strong.
“I love it. [Thanks to] recurring revenue ever since they went that model with [CEO] Satya Nadella, they have crushed it and they continue to do so,” said Investitute co-founder Jon Najarian.
The stock is up nearly 35% so far this year, and is up 3.5% in the last week alone. Microsoft has been moving to higher highs since it announced its new cloud-gaming project which could rival Google’s Stadia.
“If you’re looking out as the next catalyst for this company [it’s] going to be their earnings, probably the last week of July,” said Dan Nathan, co-founder and editor of RiskReversal.com, on CNBC last week.
But Nathan also cautioned, “It could be a good time to buy, maybe, some protection against that long as you keep rolling up some puts.”
Another stock that has performed well recently is Under Armour (NYSE: UAA).
The active wear maker is up 50% so far this year, and nearly 10% in the last month. The stock is just below its all-time highs, and Nuveen’s Stephanie Link notes that 20% of its shares are still short.
“It’s a pretty good story in terms of margin improvement,” Link said. “They’re turning things around in North America. They have a lot of room to grow internationally. I still like it. I’ve owned it for a while but I still like it.”
While these traders say there’s upside ahead for both stocks, analysts are more bullish on Microsoft. Just yesterday, Deutsche Bank boosted its price target for MSFT to $155, 13% higher than the stock’s current price.