What Is Relative Strength in Stocks? The Best 2026 Filter

Relative strength is just how a stock is doing compared to something else, usually the broader market.

Instead of asking “Is NVIDIA (NVDA) up or down?”, relative strength asks, “Is NVDA doing better or worse than the S&P 500 (SPY) over the same period?” That comparison turns a messy market into a clean scoreboard of winners and laggards.

A common way to measure it is 90‑day total return vs SPY. Total return means price change plus dividends over the last 90 days. If SPY is up 5% over those 3 months and NVDA is up 40%, then NVDA’s relative strength vs SPY is roughly +35 percentage points over that window.

Why 90 days? It’s long enough to filter out day‑to‑day noise, but short enough to capture current leadership. Many screeners let you pick 1‑month, 3‑month, 6‑month relative performance. Ninety days sits in a sweet spot between “too twitchy” and “too slow.”

Here’s the core idea: - Relative strength > 0: the stock is beating the benchmark (showing leadership). - Relative strength ≈ 0: moving with the crowd. - Relative strength < 0: lagging; money is likely flowing elsewhere.

Once you start looking at your watchlist this way—"Who’s actually beating SPY right now?”—you’ll see your portfolio very differently. You’re no longer guessing; you’re ranking.

You don’t need a quant degree to calculate relative strength. You just need two numbers: the stock’s 90‑day return and SPY’s 90‑day return.

Let’s walk it through with a real‑world example from 2026. Say you’re comparing NVIDIA (NVDA) and SPY:

1) Find 90‑day performance Use a free site like Yahoo Finance, TradingView, or your brokerage app. Pull up NVDA, set the chart to 3 months, and note the percentage gain or loss. Do the same for SPY.

Imagine this snapshot (numbers for illustration): - Over the last 90 days, SPY is up about 6%. - Over the same 90 days, NVDA is up about 45%.

2) Subtract SPY from the stock Relative strength vs SPY ≈ 45% − 6% = +39 percentage points.

That +39pp number tells you NVDA hasn’t just gone up, it has crushed the market over that period.

3) Repeat for another stock Take Apple (AAPL) as a contrast. If AAPL is up, say, 10% over the same 90 days, then its relative strength vs SPY is 10% − 6% = +4 percentage points.

• NVDA: +39pp vs SPY
• AAPL: +4pp vs SPY

Both are “up,” but NVDA is the clear leader. That’s the power of relative strength—you get a ranking, not just random green numbers.

Most screeners will calculate this for you automatically. Look for columns labeled “3‑month perf vs S&P,” “% vs benchmark,” or a dedicated relative performance line where the stock’s line is plotted against SPY. Once you see those columns, you can sort your watchlist from strongest to weakest in one click.

A handy rule of thumb: when a stock beats SPY by 30 percentage points or more over 90 days, you’re looking at serious leadership, not just a lucky bounce.

Think about three stocks in a hot theme like AI in early 2026: NVIDIA (NVDA), Super Micro Computer (SMCI), and a broad market ETF like SPY.

Imagine this 90‑day performance snapshot: - SPY: +5% - NVDA: +38% - SMCI: +52%

Relative strength vs SPY: - NVDA: 38% − 5% = +33pp - SMCI: 52% − 5% = +47pp

That kind of gap usually doesn’t happen by accident. There’s often a clear story behind it:

• NVDA has been posting huge revenue and earnings growth driven by AI chips, with markets reacting strongly after recent earnings beats and guidance updates in 2026.
• SMCI has been riding the AI wave too, as demand for its servers and data‑center hardware exploded alongside big orders from cloud and AI customers.

In both cases, big investors are voting with real money—pushing these stocks far ahead of a broad, diversified index like SPY.

Why focus on +30 percentage points? - It’s large enough to suggest sustained buying, not just a one‑day pop. - It helps filter out stocks that are only slightly better than average. - It highlights where capital is flowing right now, which is what often fuels further moves.

This doesn’t mean a +30pp stock is “safe” or “guaranteed.” It just means the market has been clearly favoring it over the last quarter. As a retail investor, you can use this to prioritize your research: dig deeper into the names with the strongest relative strength instead of spreading your time across every stock that happens to be green.

Relative strength and RSI sound similar, but they’re completely different tools.

• Relative strength (what we’re talking about): compares a stock’s performance to something else—usually the market (like SPY) or a sector. Example: “TSLA is +32 percentage points vs SPY over 90 days.”
• RSI (Relative Strength Index): a momentum oscillator on a chart that moves between 0 and 100 and tries to show if a stock is “overbought” or “oversold.” RSI above 70 is often seen as overbought; below 30, oversold.

You could have a stock like Tesla (TSLA) in 2026 with: - Huge 90‑day relative strength vs SPY (say, +30pp or more). - An RSI reading near 70 after a strong run.

Those two facts are not in conflict: - The relative strength is telling you: “Hey, TSLA has been a leader vs the market over the last 3 months.” - The RSI is telling you: “In the very short term, this move has been strong and could be stretched.”

Key differences in how you use them: - Relative strength is about selection and ranking—which stocks are worth a closer look because they’re outperforming. - RSI is about timing and risk—is this leader temporarily overheated or beat up?

If you mix them up, you might see a high RSI and assume a stock isn’t strong. In reality, many of the best performers—think NVDA, SMCI, or other momentum names in 2025–2026—spend a lot of time with both strong relative strength and a high RSI.

A practical way to think about it: - Start with relative strength to build a shortlist of leaders. - Then check tools like RSI to understand short‑term risk and entry points, if timing matters to you.

Same words, very different jobs.

Here’s how to bring relative strength into your day‑to‑day investing without turning it into a second job.

1) Create a simple benchmark Decide what you’re comparing against. For most US stock investors, that’s SPY (tracks the S&P 500). If you’re very tech‑heavy, you might also look at QQQ (tracks the Nasdaq‑100).

2) Build a small watchlist Start with 15–30 names you care about: big tech like AAPL, MSFT, GOOGL, growth names like TSLA or NVDA, plus a few sector ETFs (like a financials ETF if you own bank stocks).

3) Use a screener that shows 3‑month performance Most brokerages and free sites let you add columns for 1‑month, 3‑month, and 6‑month returns. Add: - 3‑month % change for each stock. - 3‑month % change for SPY (your benchmark).

If your tool doesn’t have a built‑in “vs SPY” column, just eyeball or export to a spreadsheet and subtract SPY’s number from each stock.

4) Sort from strongest to weakest Once a month, sort your watchlist by 3‑month performance relative to SPY. Focus your research time on the top tier—the stocks that are beating the market by double digits, especially those near or above that +30 percentage point mark.

5) Ask: “Why is this strong?” For a name like NVDA or SMCI, you’ll often see clear reasons in 2026: - Recent earnings beats and raised guidance. - Strong revenue growth tied to AI and data‑center demand. - Upgraded analyst targets and heavy trading volume after news.

The goal isn’t to chase every hot stock. It’s to understand where the market’s enthusiasm is and decide, with your own judgment, whether you want exposure to that story.

6) Track your own holdings vs SPY Once a quarter, compare your portfolio’s 3‑month return to SPY. Then, within your portfolio, see which holdings are consistently showing positive relative strength and which ones have been lagging for multiple quarters.

You don’t have to act on every laggard, but this habit keeps you honest. It shifts the conversation from “I like this company” to “This company has been losing to the market for months—do I still want it?”