Growth stocks thrive during economic expansions when interest rates are low. Since the financial crisis in 2008, growth stocks have seen a massive rally, significantly outperforming value stocks and the major stock indices.
Unfortunately, with inflation skyrocketing the era of historically low interest rates and ever-expanding stock valuations has ended abruptly. Investors concerned about a spike in rates have abandoned growth stocks and rotated into value stocks. As a result, the sky-high valuations among growth stocks have come back to earth and may offer plenty of buy-the-dip opportunities for opportunistic long-term investors.
There is quite a bit you should know before you dive in. If you want to invest in growth stocks right away, here is a quick guide that can help.
How to Invest in Growth Stocks - Quick Guide
- Research your growth stocks – Identify powerful long-term market trends and the companies with strong competitive advantages and large addressable markets.
- Define your strategy – trading lets you speculate on the price movement; dealing lets you take direct ownership of the stocks.
- Take your position – create an account with us to start investing in growth stocks.
- Copy lead traders – Alternatively, you can copy the moves of top performing traders in real time with NAGA Autocopy.
Below we have included some larger players as well as three-step processes to find the best growth stocks based on your risk appetite and specific areas of interest.
What Is a Growth Stock?
A growth stock is any share in a company that is anticipated to grow at a rate significantly above the average growth for the market. These stocks generally do not pay dividends. This is so that short-term growth can be accelerated. Issuers of growth stocks are typically businesses that desire to reinvest any earnings they accrue. When investing in growth stocks, investors hope to profit from capital gains when they eventually decide to sell their shares in the future.
Growth stocks are very often smaller, newer companies, or industry disruptors. Whatever their size or age, growth companies usually offer unique services and products, and frequently own novel technologies or intellectual property that puts them ahead of other companies in the same industry.
Growth stocks are frequently smaller, younger businesses or market disruptors. Growth companies, regardless of their size or age, typically provide distinctive services and goods and frequently possess novel technology or intellectual property that puts them ahead of other businesses in their industry.
Understanding Growth Stocks
Any sector or industry may have growth stocks, which often trade at a high price-to-earnings (P/E) ratio. Although they might not be making money right now, they should in the future.
With growth stock, an investor may profit from their investment only when they eventually sell their shares because they don't normally give dividends. When the time to sell the stock comes, investors suffer a loss if the company performs poorly.
Growth stocks frequently have similar characteristics. For instance, emerging businesses frequently provide distinctive product lines. They might have access to technologies or own patents that put them ahead of rivals in their field. To continue to be in front of competitors, they reinvest profits to develop even newer technologies and patents to ensure longer-term growth.
Because of their patterns of innovation, they often have a loyal customer base or a significant amount of market share in their industry.
Growth Stocks vs. Value Stocks
Value stocks are different from growth stocks. Investors anticipate growth stocks to experience significant capital gains due to the underlying company's rapid growth. These equities may appear to be expensive as a result of this expectation due to their typically high price-to-earnings (P/E) ratios.
Value stocks, on the other hand, are frequently overlooked or undervalued by the market, yet they might eventually increase in worth. Additionally, investors aim to gain from the dividends they normally pay. Low price-to-earnings (P/E) ratios are typical for value equities.
For portfolio diversity, some investors can strive to incorporate both growth and value equities. Others can want to specialize by putting more of an emphasis on value or growth.
How to Find the Best Growth Stocks
If you decide to invest in growth stocks, it can be hard to identify the right growth companies. To find the best growth stocks for your stock portfolio, you’ll need to:
- Identify powerful long-term market trends
- Prioritize companies with competitive advantages
- Further narrow your list to companies with large addressable markets
1. Identify powerful long-term market trends
The search for the best growth stocks begins with identifying macro trends that change the way people do everyday things. Digitization, for example, has been a dominant trend over the past two decades. It's also paved the way for other megatrends such as the rise of e-commerce and streaming entertainment and the move toward cashless payments.
Once growth stock investors identify a trend -- say, the rollout of driverless cars or the shift to renewable energy -- that could be "the next big thing," they then identify which specific companies stand to benefit from the changing market dynamics associated with the trend.
Changing societal trends can have a huge impact on growth stocks. For example, the coronavirus pandemic caused a renewed focus on home fitness, health companies, or remote work that saw enormous gains.
2. Prioritize companies with competitive advantages
It’s also important to invest in growth companies that possess strong competitive advantages. Otherwise, their competitors may pass them by, and their growth may not last long.
Competitive advantages become especially important during turbulent times such as the pandemic or periods of high inflation. A strong competitive advantage will help companies survive and thrive through market downturns, while those without a competitive advantage will struggle. Some competitive advantages are:
Network effects: can make it difficult for new entrants to displace the current market share leaders Nvidia and Tesla. Scale advantages: Amazon is a great example in this category because its massive global fulfillment network is something its smaller rivals will find extremely difficult to replicate. High switching costs: difficulties involved in switching to a rival product or service. Shopify is a perfect example of a business with high switching costs.
3. Further narrow your list to companies with large addressable markets
Finally, you’ll want to invest in businesses with large addressable markets -- and long runways for growth still ahead. Industry reports which provide estimates of industry sizes, projections for growth, and market share figures -- can be very helpful in this regard.
The larger the opportunity, the larger a business can ultimately become. And the earlier in its growth cycle it is, the longer it can continue to grow at an impressive rate.
Alternatively, investors can buy shares in growth-oriented exchange-traded funds (ETFs). Prospective shareholders should first understand and agree with how a fund selects investments for its portfolio. These ETFs invest in fast-growing companies with the hope of matching or outperforming benchmark indices. Growth ETFs are a popular option for investors who want to gain portfolio exposure to growth stocks without having to research and choose individual stocks themselves.
You can find an ETF to suit any investment strategy you desire by using NAGA WebTrader.
Top Growth Stocks to Watch in 2025
Companies that can capitalize on powerful long-term trends can increase their sales and profits for many years, generating wealth for their shareholders along the way. Here are some examples of growth stocks that generated astronomic returns in the last decades.
- Nvidia (NVDA)
- Tesla (TSLA)
- Broadcom (AVGO)
- Ely Lilly (LLY)
- Applied Digital (APLD)
- Palantir (PLTR)
- Shopify (SHOP)
Nvidia (NVDA)
Nvidia Corporation (NVDA) operates in the booming AI and high-performance computing sector. Over the last five years, its stock surged significantly, driven by expanding AI business sectors. It has a high PE ratio of approximately 53, an EPS of about $3.51, and does not pay dividends, reflecting strong growth. NVIDIA has a wide moat in the GPU market, benefiting from insatiable demand for AI computing power, with expected revenue growth of over 50% in 2025.
Past performance is not a reliable indicator of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance.
This combination of dominant market position and robust earnings growth keeps it highly favored by investors, distinguishing it sharply from traditional tech firms. Nvidia’s growth is driven not only by core hardware sales but also by expanding opportunities in artificial intelligence, autonomous vehicles, and cloud computing, making it a premier growth stock in technology.
Tesla (TSLA)
Tesla (TSLA) remains a highly debated growth stock but continues to command an enormous valuation, with a market capitalization around $1.33 trillion. The company leads in electric vehicles and clean energy, maintaining rapid earnings growth and a premium valuation. Tesla has a high PE ratio, no dividends, and above-average EPS growth, driven by technology advancements. Tesla continues to innovate and expand its production capacity, maintaining strong investor confidence as it capitalizes on the accelerating EV market transition.
Past performance is not a reliable indicator of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance.
Despite selling roughly 1.8 million cars annually, far fewer than Toyota, Tesla's market cap and investor enthusiasm reflect its innovation ambitions and technological leadership rather than sheer volume of vehicle sales, continuing to polarize analysts and investors alike. This situation echoes its rise over recent years, where valuation growth has often outpaced underlying sales performance growth.
Broadcom (AVGO)
Broadcom (AVGO) is a major player in the semiconductor and technology sectors with a market capitalization of approximately $1.6 trillion as of late 2025. This makes it one of the top 10 most valuable companies globally. Its stock price is around $350 per share, with an earnings per share (EPS) near $3.92 and a high price-to-earnings (P/E) ratio of about 90, reflecting investor expectations for continued rapid growth.
Past performance is not a reliable indicator of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance.
Broadcom's valuation has surged significantly over the past year, doubling its market cap in the last 12 months, driven by its strong position in chip manufacturing and expanding presence in software and infrastructure technology markets. Despite its high valuation multiples compared to some peers, Broadcom's diversified business model across semiconductors and enterprise software provides a foundation for its continued growth and market confidence.
Eli Lilly (LLY)
Eli Lilly (LLY) remains a powerhouse in pharmaceuticals as, with a market capitalization close to $923 billion as of November 2025. The company has demonstrated strong earnings growth with an EPS of around $20.39 and a price-to-earnings ratio of about 51, reflecting high investor confidence in its innovative drug portfolio. Its robust R&D pipeline and significant market share in high-growth therapeutic areas sustain its status as a defensive yet growth-oriented stock.
Past performance is not a reliable indicator of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance.
Despite some recent stock price pullbacks, Eli Lilly’s growth is fueled by its ongoing investment in manufacturing and robust demand for its leading pharmaceutical products, solidifying its position as one of the industry's most valuable and fastest-growing companies.
Palantir (PLTR)
Palantir Technologies (PLTR) is prominent in data analytics and AI platforms, displaying strong earnings growth driven by expanding government and commercial contracts. It carries a high PE ratio, does not pay dividends, and exhibits an above-average pace of EPS growth, fitting the growth stock profile in a rapidly developing tech segment.
Past performance is not a reliable indicator of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance.
Its annual revenue has grown substantially, nearing $3.1 billion, driven by strong gains in government contracts and increasing adoption in commercial sectors. Palantir is often viewed as a bullish growth stock with high volatility, as investors stake in its long-term potential in artificial intelligence and data intelligence markets.
Shopify (SHOP)
Shopify Inc. (SHOP has demonstrated rapid revenue growth driven by the accelerating shift to online retail. It operates in a fast-developing industry segment, carries a high PE ratio typical of growth stocks, does not pay dividends, and exhibits strong EPS expansion fueled by continuous platform innovation and market penetration.
Past performance is not a reliable indicator of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance.
Shopify’s valuation growth, more than doubling its market cap in the last year, reflects growing adoption of digital commerce and expanding services around its core platform, although the high P/E ratio signals some valuation risk and reliance on future earnings growth to justify current prices.
Other growth stocks to watch:
- Meta Platforms, known as Facebook, a social media, virtual reality, and metaverse giant, with high growth in digital ads and user engagement.
- Alphabet, the parent company of Google, leading in digital advertising, cloud services, and AI innovation.
- Microsoft, the tech giant driving growth through cloud computing, AI, and enterprise software solution.
- Amazon dominates global e-commerce and cloud computing with continuous expansion into new markets and technologies.
- Alibaba Group dominates e-commerce and cloud computing in Asia with rapid revenue expansion.
- Taiwan Semiconductor Manufacturing is a premier semiconductor foundry fueling global chip demand.
- ASML Holding provides cutting-edge photolithography systems essential to semiconductor manufacturing innovation.
- MercadoLibre is Latin America’s largest e-commerce and fintech platform, growing fast in digital payments and marketplaces.
Top Growth ETFs
Growth-centric ETFs invest in securities deemed to possess growth characteristics, including those with rapidly growing sales and relatively high price-to-earnings ratios.
For example, the Vanguard Growth ETF, the second-largest growth ETF on the market, aims to track the performance of the CRSP US Large Cap Growth Index. This means it focuses on larger companies that are still growing fast, like Amazon. Meanwhile, the Vanguard Small-Cap Growth ETF invests in smaller businesses that are more commonly associated with growth stocks. Invesco QQQ Trust is the largest growth fund by total assets, while iShares Core S&P Mid‑Cap ETF is the third largest one, followed closely by iShares Russell 1000 Growth ETF.
Going further, investors can choose to invest in a specific sector through growth investing funds like Vanguard Information Technology ETF, Health Care Select Sector SPDR Fund, Technology Select Sector SPDR Fund, or iShares Russel 2000 Growth.
You can find an ETF to suit any investment strategy you desire by using NAGA Web Trader.
The stocks and ETFs highlighted on this list are sourced from industry analysts, but they may not be a perfect fit for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
Past performance is not a reliable indicator of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance.
*Note: The stocks and ETFs highlighted on this list are sourced from industry analysts, but they may not be a perfect fit for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
How to Invest in Growth Stocks
There are two routes to investing in growth stocks: speculating on their prices using CFDs or buying the assets in the hope they increase in value.
Trading growth stocks using CFDs
A CFD is a contract in which you agree to exchange the difference in the price of an asset from when you first open your position to when you close it. You are speculating on the price of the market rather than taking ownership of the stocks. If you open a long position and the stock or ETF does increase in value, you’ll make a profit, but if it falls in price, you’ll make a loss – the opposite is true for a short position.
Before you can start, you would need to open a CFD trading account.
Buying growth stocks and growth ETFs
This means that you take ownership of a portion of the company or fund outright, with the intention of holding it with a brokerage and profiting if it increases in value.
Before you can start, you would need to open an investing account with a broker like NAGA.com.
Get Started with NAGA.com
- Choose which type of account you want to use. Your first concern should be your risk appetite and time horizon. If you want to buy and hold growth stocks, open an investing account. If you want to speculate on price movements (including falling prices) with zero commission and leverage, open a CFD trading account.
- Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity.
- Fund your account with fiat money. Before buying and trading any crypto stock, you need to fund your exchange account with U.S. dollars, Euros, or other currencies.
- Select your stocks. We strongly recommend that you thoroughly research the growth stocks that suit your portfolio and risk appetite. Alternatively, investors can buy shares in growth-oriented exchange-traded funds (ETFs).
- Place a buy order for your chosen stock. Follow the steps required by the trading platform to submit and complete a buy order.
Open a Trade Account Open an Invest Account Copy Lead Traders
When trading stocks, the CFDs (contracts for difference) are stored in your account and are more liquid than the underlying asset. However, you should be aware that CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading CFDs. There are liquidity risks and margins you need to maintain; if you cannot cover reductions in values, your provider may close your position, and you'll have to meet the loss no matter what subsequently happens to the underlying asset.
With NAGA, you can trade CFDs on a wide range of stocks and invest in +3,000 stocks and ETFs with ownership.
Is growth investing right for you?
The investment case for growth stocks mostly boils down to one thing: share price appreciation.
- Growth stocks are focused on growing and this means they are reinvesting any money that they are making;
- The size and potential of growth stocks mean share prices can be extremely sensitive. One contract or announcement can make or break a company;
- Although most growth stocks are small or fledging companies, they can also be large market leaders.
Decide whether you want to buy stock or trade stocks. If you invest, then you buy the shares outright and are entitled to any dividends that are paid. If you trade shares, you don’t own them outright, but you can use leverage and speculate in both directions.
Free resources
Before you start investing and trading in growth stocks, you should consider using the educational resources we offer like NAGA Academy or a demo trading account. NAGA Academy has lots of investing courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a better trader or make more informed investment decisions.
Our demo account is a suitable place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for stock investors who are looking to make a transition to leveraged trading.
