The stocks in this article are all trading near their 52-week highs. This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.

But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. Keeping that in mind, here are three stocks that are likely overheated and some you should look into instead.

F5 (FFIV)

One-Month Return: +5.7%

Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 (NASDAQ: FFIV) provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations.

Why Does FFIV Worry Us?

1. ARR growth averaged a weak 3.3% over the last year, suggesting that competition is pulling some attention away from its software
2. Estimated sales growth of 5.8% for the next 12 months implies demand will slow from its two-year trend
3. Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses

F5 is trading at $418.73 per share, or 6.9x forward price-to-sales. Read our free research report to see why you should think twice about including FFIV in your portfolio.

Connection (CNXN)

One-Month Return: +2.3%

Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ: CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.

Why Does CNXN Give Us Pause?

1. Sales trends were unexciting over the last two years as its 2.5% annual growth was below the typical business services company
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 6.9% annually
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

At $73.44 per share, Connection trades at 18.7x forward P/E. Check out our free in-depth research report to learn more about why CNXN doesn’t pass our bar.

First Horizon (FHN)

One-Month Return: +6.4%

Tracing its roots back to 1864 during the Civil War era, First Horizon (NYSE: FHN) is a Tennessee-based bank holding company that provides commercial and consumer banking, wealth management, and specialty financial services across multiple states.

Why Is FHN Not Exciting?

1. 7.3% annual net interest income growth over the last five years was slower than its banking peers
2. Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 5.7% annually
3. Estimated tangible book value per share growth of 5.3% for the next 12 months implies profitability will slow from its two-year trend

First Horizon’s stock price of $25.84 implies a valuation ratio of 1.4x forward P/B. Dive into our free research report to see why there are better opportunities than FHN.

High-Quality Stocks for All Market Conditions

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.