The Big Winners in the December 2025 Market Rally: Are These Stocks Still on the Rise?

The December 2025 market rally has been fueled by a potent mix of Fed rate-cut expectations, sector-specific catalysts, and earnings upgrades. Among the standout performers are Rocket Lab (RKLB), Carvana (CVNA), and Pan American Silver (PAAS). These stocks have surged on a combination of operational progress, strategic acquisitions, and favorable macroeconomic conditions. But are these gains sustainable, or are we witnessing a short-term frenzy? Let's dissect the drivers behind their momentum and evaluate their long-term potential.

Rocket Lab: A Rocket to the Stars, but Is the Fuel Running Out?

Rocket Lab's 15.7% outperformance relative to its 50-day moving average in late 2025 has drawn attention, but the real story lies in its fundamentals. The company reported a 48% year-over-year revenue jump to $155 million in Q3 2025, driven by its growing backlog of $1.1 billion and the impending launch of its Neutron rocket in Q1 2026. Analysts have raised price targets, with Stifel and BofA hiking their estimates to $65 and $60, respectively, reflecting confidence in its space systems and launch segments.

However, Rocket Lab's long-term viability hinges on the success of the Neutron rocket. Delays in this project could disrupt near-term revenue streams, as the company's current growth is largely tied to its existing backlog. While the Fed's rate cuts may lower borrowing costs for capital-intensive projects, Rocket Lab's valuation remains speculative. A "Moderate Buy" rating from analysts suggests optimism, but investors should monitor execution risks.

Carvana: A Comeback Story, But Is It Overvalued?

Carvana's 79% rally in 2025 has been nothing short of remarkable. Its inclusion in the S&P 500 in late 2025 triggered a 12% single-day surge, as institutional investors flocked to the stock. Operational improvements-such as a 15 percentage point rise in gross margin and a reduction in net debt from $8 billion to $3 billion-have restored investor confidence.

Yet, Carvana's valuation remains contentious. At a PE ratio of 80.3x, it trades well above the industry average, raising concerns about overvaluation. A discounted cash flow (DCF) analysis pegs its fair value at $354.36, just 0.8% below its current price, suggesting the market has priced in most of its near-term upside. The Fed's rate cuts could further support its used car market, but economic downturns pose a risk to subprime borrowers, a key segment for Carvana. This stock is a high-conviction play, best suited for those comfortable with volatility.

Pan American Silver: A Silver Lining in a Gold-Driven World

Pan American Silver has emerged as a beneficiary of the Fed's rate-cut cycle and surging industrial demand for silver. The company's Q3 2025 results were stellar: record free cash flow of $251.7 million, a 20% dividend increase, and a $500 million acquisition of MAG Silver Corp expected to close in late 2025. Exploration successes at Jacobina, El Peñon, and La Colorada have expanded its resource base, while lower all-in sustaining costs of $15.43 per silver ounce position it to capitalize on higher bullion prices.

The Bigger Picture: Fed Policy, M&A, and Earnings Upgrades

The Fed's rate cuts in 2025 have been a universal tailwind, particularly for capital-intensive sectors like aerospace and mining. Lower real yields have buoyed bullion prices, while M&A activity-such as PAAS's MAG Silver acquisition-has created value for shareholders. Earnings upgrades, especially for Carvana and Pan American Silver, have reinforced these narratives.

Yet, caution is warranted. M&A activity remains subdued due to trade policy uncertainties, and Rocket Lab's reliance on a single product (Neutron) introduces execution risk. For Carvana, the high PE ratio suggests the market is pricing in a perfect storm of economic conditions.

Conclusion: Long-Term Opportunities or Short-Term Hype?

• Rocket Lab offers high growth potential but is best viewed as a speculative bet. Its success depends on the Neutron rocket and sustained demand for space infrastructure.
• Carvana has transformed its balance sheet and profitability, but its valuation leaves little room for error. A slowdown in the used car market or rising interest rates could pressure its shares.
• Pan American Silver is the most compelling long-term play, with strong fundamentals, exploration success, and a favorable macro backdrop for precious metals.

The December 2025 rally has been driven by a mix of macro and micro factors, but sustainability will depend on execution. For investors, the key is to differentiate between companies with durable moats (like PAAS) and those riding short-term trends (like CVNA). As the Fed's 2026 rate-cut path becomes clearer, these stocks will face their true test.