Hot or Not, Stock Market Edition: 12/25/2025

Happy holidays to all those celebrating! While things are quiet, why not take a moment to study these market movers and be prepared when the market reopens? 

• Hot: Gap (GAP) catches fresh momentum; Wayfair (W) gains ground
• Not: Pony AI (PONY) hits brakes; American Homes 4 Rent (AMH) slips

P.S. For more stocks making moves, check out our Zen Ratings Upgrades & Downgrades screener.

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🔥 HOT: The home furnishings market remains competitive, but Wayfair (W) continues to capture market share (and gains — the stock’s up over 20% in the past 3 months) as consumers increasingly shop online for furniture and décor. The company has been working to improve profitability metrics and streamline operations, efforts that could pay dividends as housing market dynamics evolve. Industry watchers note that while housing turnover has been sluggish due to elevated mortgage rates, any improvement in that metric could serve as a catalyst for home goods retailers. W earns a B (Buy) Zen Rating, firmly placing it in the top 15% of stocks we track. Particular areas of strength as revealed by the stock’s Component Grades include Growth (A rated) and Momentum and AI (Both B rated) — so while it’s perhaps not a super sexy stock, the company’s clear popularity and continued focus on operational efficiency could pay off in the long term.  

🥶 NOT: American Homes 4 Rent (AMH) is down 14% in the past year, and just got downgraded from a C (Hold) Zen Rating to a D (Sell) rating. The residential REIT has been caught in the crosscurrents of elevated interest rates and a challenging housing market, pressuring valuations across the single-family rental space. While some outlets suggest easing inflation to four-year lows could benefit real estate by potentially lowering rates, the market hasn't yet priced in that optimism. Looking at the Component Grades, the stock shows mediocre performance across the board with C grades for Value, Momentum, Sentiment, Financials, Safety, and AI. More concerning, it ranks 14th out of 20 in the Residential REIT industry with an F industry grade, suggesting the entire sector is facing headwinds. The bottom line? Until interest rate clarity improves or the stock shows technical strength, the risk-reward doesn't favor jumping in here.

🔥 HOT: Fall into the Gap (GAP)! The clothing retailer is up 20% over the past three months. CEO Mark Breitbard's strategy of modernizing stores, launching new product lines, and capitalizing on fashion trends appears to be paying off — and the story is catching Wall Street's attention as analysts upgrade their outlook on the company's turnaround momentum and raise valuation targets. The stock earns a B (Buy) Zen Rating, ranking in the 85th percentile of the 4600+ stocks we track. Looking at the Component Grades, it scores particularly well with B grades for Value, Sentiment, and Financials, suggesting the fundamentals are backing up the price action. It creates a compelling case for investors looking for exposure to consumer discretionary.

🥶 NOT: Pony AI (PONY) has gained 29% in the past month. So why isn’t it hot? The Chinese autonomous vehicle company's volatility underscores the challenges facing the AV sector as investors reassess timelines for commercialization and profitability. PONY was just downgraded to a D (Sell) rating from WallStreetZen, landing in just the 10th percentile of the 4600+ stocks we track. Looking at the Component Grades for clues, the only bright spot is a B grade for Safety, while the stock scores D grades for Value, Momentum, Sentiment, and Financials. The company ranks 15th out of 17 in the Rental & Leasing Service industry, itself earning a D industry grade. Its recent rating downgrade combined with general AV challenges signal there are better places to park your money — like these 3 highly-rated AI stocks — while this story develops. 

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