Finding value in a frothy market can be tricky. One signal that traders and investors use is the golden cross. This is when a stock’s 50-day moving average crosses above its 200-day moving average. This is a bullish signal that suggests the stock has momentum, particularly when it’s supported by strong fundamentals.
Golden cross patterns can serve as useful technical confirmation for traders looking to ride strong trends. But when those signals align with improving fundamentals, as they do with the three stocks in this article, the odds of sustained upside improve, which can make them attractive to longer-term investors.
A Rail Stock on the Move as Shipping Demand Picks Up
Our first stock takes us to Canada. CSX Corp. (NASDAQ: CSX) is known as a value stock. It has a dividend yield near 1.3% and a forward P/E of around 19x. However, CSX stock has recently been offering investors momentum and growth.
CSX stock formed a golden cross in mid-July and has continued to climb before and after the company’s earnings report on July 23.
CSX is one of the leading rail stocks and is often considered a bellwether for the industrial economy. Economic activity is expected to increase in the back half of 2025, supported by recent data suggesting freight volumes may have formed a bottom.
The company’s beat on the top and bottom lines shows that management’s focus on network efficiency and operating ratio improvements is paying off.
Adding to the fundamental case for CSX stock is the company’s ability to ratify a five-year collective bargaining agreement (CBA) with the Brotherhood of Locomotive Engineers and Trainmen (BLET).
CSX stock is trading within 8% of the analysts' consensus price target of $37. However, several analysts have been raising their price targets since the earnings report. That includes Robert Baird with a revised target of $44.
Rumors of Alphabet’s Death Were Exaggerated
Alphabet Inc. (NASDAQ: GOOGL) has turned positive about a week after reporting earnings on July 24. Investors initially sent GOOGL stock lower but have turned more positive after digesting the company’s results.
Specifically, the company has managed to quiet concerns about its Google search business.
Alphabet posted accelerating growth in both cloud computing and ad revenue, which is evidence that its AI-powered products (e.g., Gemini) are becoming an integrated part of the company’s ecosystem. That means that AI is enhancing search instead of threatening its existence.
GOOGL stock formed a golden cross shortly before the company’s earnings report. Adding to the bullish narrative, the stock trades at a forward P/E of around 21x, making it one of the more attractive technology stocks.
The company has over $100 billion in cash, which adds to the fundamental case.
The stock is trading within about 7.8% of its consensus price target of $211.39. However, analysts have been raising their price targets an average of 7% since the earnings report, which adds more strength to the belief that the golden cross is just the beginning.
This Fast-Growing Tech Stock Is Riding the Cloud and AI Boom
Datadog Inc. (NASDAQ: DDOG) is a leading provider of observability tools for cloud infrastructure. Specifically, the company is a leader in log management and observability software.
Its platform functions as a “digital control room” for all the apps, websites, and servers in use.
DDOG stock appears to be riding a wave that’s been present for many software stocks.
The stock completed a golden cross in late July after a consolidation. One reason for the bullish sentiment is Datadog’s inclusion in the S&P 500, which will bring in institutional dollars.
Datadog stock may receive a boost from its upcoming earnings on August 6. The company reported 25% year-over-year (YOY) revenue growth in the last quarter based on strong customer retention.
As of July 30, DDOG stock is trading above its consensus price target. Barclays just raised its price target to $170. Investors could see more of the same, both before and after earnings.
