Momentum stocks are securities that are rising fast and seeing their gains accelerate. This is often because a given stock has one or more catalysts that have led to a rally in its share price. Catalysts can include strong earnings, regulatory approval of a new product or service, a sizable stake taken by a notable investor. Additionally, there can be hype surrounding a particular economic sector, company or product that’s driving investor demand.

Notably, momentum typically indicates underlying strength in a stock. For investors, there is nothing better than when a stock they own builds momentum and the share price continues to rise. However, it is important to stay on top of such stocks. Often times, momentum can quickly dissipate. Circumstances can change, and a single bad earnings report can lead to a quick selloff. Thus, the goal is to ride momentum stocks for as long as possible. Investors need to remember to take profits, and exit such positions accordingly.

With that said, here are the three best momentum stocks to buy in May 2023.

Capital One (COF)

Warren Buffett still has a lot of sway. This is evident in the share price of Capital One Financial Corp. (NYSE:COF), the company that is best known for its credit cards, but also functions as a full-service bank. COF stock has gained 10% since it was disclosed in a regulatory filing on May 15 that Buffett opened a new position in the stock during this year’s first quarter. Through his holding company, Berkshire Hathaway (NYSE:BRK-B), Buffett bought 9.92 million shares of Capital One, worth about $950 million.

News that Buffett has invested in COF stock led it to rebound from levels near its 52-week low. Like most bank stocks, Capital One had been dragged lower in recent months following the high-profile failures of several regional U.S. lenders. However, the stock now appears to have wind in its sales and is climbing higher.

Incidentally, Buffett wasn’t the only well-known investor to buy Capital One stock in Q1. It was also disclosed that Michael Burry of The Big Short fame also opened a new position in COF stock in the first three months of the year.

Nvidia (NVDA)

Up 120% in less than five months, shares of microchip and semiconductor company Nvidia (NASDAQ:NVDA) look unstoppable right now. The company is riding momentum around both artificial intelligence and cloud computing, with analysts noting that Nvidia’s chips are essential for both industries. NVDA stock has been gathering steam in the lead-up to its next quarterly earnings print scheduled for May 24. Demand for its chips among A.I. firms and cloud computing servers is expected to lead the company to revise its outlook for the year higher.

Investment bank Oppenheimer & Co. (NYSE:OPY) recently maintained its buy rating and increased its price target on NVDA stock to $350 a share from $300, noting that AI momentum is likely to continue for the foreseeable future. The company is doing its best to capitalize on the hype surrounding artificial intelligence, as well as strong demand for cloud computing.

The big question now is whether Nvidia’s upcoming earnings will be able to match the red hot expectations of analysts and investors. I think more upside could be on the horizon, if investors continue to look for ways to play this incredible trend.

Eli Lilly (LLY)

Shares of pharmaceutical giant Eli Lilly (NYSE:LLY) have gained nearly 50% over the last 12 months. This includes a 20% gain so far this year.

Momentum has been building behind LLY stock due to expectations for its weight loss drug called Tirzepatide. Speculation is that the U.S. Food and Drug Administration (FDA) will approve the medication for widespread use by year’s end. Most analysts expect Tirzepatide, which is also called Mounjaro, to be the next blockbuster pharmaceutical. Some are going so far as to predict that it will become the best-selling medication of all time.

Eli Lilly is pulling out all the stops to prepare for FDA approval of Tirzepatide, expanding its existing manufacturing capacity and investing in advertising campaigns. Tirzepatide has already been approved for use as a diabetes treatment, and its approval for weight loss is viewed by many as inevitable, potentially giving Eli Lilly a windfall in new sales. The most recent data from clinical trials of the drug have been very encouraging, leading investors to pile into LLY stock before it potentially skyrockets.

On the date of publication, Joel Baglole held long positions in NVDA and LLY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.