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5 Rocket Stocks Geared to Rally This Week

Stocks in this article: SUVARCHDARMHCRM

Salesforce is proof positive that being first matters. The firm was one of the first major software firms to embrace cloud computing, dragging substantial sales growth out of what was little more than a buzzword for most peers.

Software-as-a-service is also a more lucrative model for software firms like CRM. Instead of selling a software license and then trying to convince customers to spend big bucks on the next iteration of the software, the cloud model lets CRM charge recurring fees while trickling feature improvements onto the platform. And because integration with customers' systems takes place deep in the Salesforce platform, switching costs are extremely high for businesses to move to rival services. With rising analyst sentiment in shares of CRM, we're betting on shares of this Rocket Stock this week.

ARM Holdings

UK-based ARM Holdings (ARMH) is the biggest chipmaker that isn't. ARM generates more than 75% of its sales from licenses and royalties, leveraging its brain trust to design the intellectual property and leaving most of the risks of manufacturing up to its licensees. While that hasn't spared ARM from the broad decline in chip stocks, the firm's exposure to high-growth mobile device chips has at least helped to lessen the blow.

ARM's $16 billion market capitalization and rich IP portfolio make it one of the more interesting names in the semiconductor industry. While it's a large-cap stock, it's small enough to make a reasonable takeover candidate for more than a few peers and rivals in the industry. And that's thanks largely due to the lack of capital-intense manufacturing assets on its balance sheet -- a fact that investors should find equally attractive.

The firm carved out a niche in low-power mobile device chips early on, leaving giants like Intel (INTC) playing catch up in recent years to turn out its own mobile offerings. While Intel has a lot more cash to throw at mobile chip development, the downturn in the semi business is likely to make INTC less willing to part with cash (particularly when it's expected to keep paying a 4.5% dividend yield). Financially, ARMH is in excellent shape too -- it's got a debt neutral position on its balance sheet, with around 500 million GPB in cash and investments after debt is taken out of the equation.

While that cash hardly makes ARMH a bargain stock at current earnings multiples, its price trajectory helps to justify it.

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