15 Best Growth Stocks

Best Growth Stocks of 2026

Methodology: How We Score Our Products

Our curated list of the best growth stocks to buy now is built using strict criteria. The growth stocks outlined above are traded on U.S. exchanges and meet the following requirements:

High Growth Sectors: We screened for sectors known for growth and earnings expansion: information technology, consumer discretionary, communication services and healthcare.

Market Capitalization of $20 Billion or More: Companies with a market cap of over $20 billion typically dominate their industries and possess competitive advantages.

Analyst Consensus of “Buy” or Better: A high number of “buy” ratings from analysts suggest the stock is expected to outperform the broader market.

Positive Earnings-Per-Share (EPS) Growth: We prioritized companies with positive EPS growth in the current year and expected to continue that growth trajectory over the next five years. Sustained earnings growth can be a marker of long-term profitability.

Positive EPS Growth Quarter Over Quarter (QoQ): A positive QoQ in earnings per share indicated the company is profitable in the short term, and this may also indicate a sign of momentum and core business strength.

Net Profit Margin: We screened for companies that delivered over 5% in net profit margin.

Forward Price-To-Earnings (P/E) Ratio of 30 or Lower. Growth stocks tend to trade at higher valuations due to their strong growth potential, but paying too much can be risky. When forward P/E exceeds 30, it may be more vulnerable to sharp declines if the economy weakens or if the company’s revenue growth slows.

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The ‘Magnificent Seven’ Stocks

The “Magnificent 7” stocks are a group of dominant U.S. tech stocks that account for around a third of the S&P 500’s total market value. These companies all have massive market capitalizations, with some in the multitrillion-dollar territory.

Stocks in the Magnificent 7 have posted at least double-digit gains over the past three years. But just a few short years ago, in 2022, they finished the year with negative growth (but so did the S&P 500 that year). Time will tell how these stocks perform in the future.

What Is Growth Investing?

Growth investing focuses on the stocks of companies that are likely to expand quickly. Growth investing prioritizes faster growth than the market, so growth companies reinvest earnings into the company in order to expand.

Growth companies rarely pay dividends, as they’re dedicating most of their resources to expanding their workforce, upgrading technology or acquiring new companies. These stocks can offer high returns, but they usually come with high volatility and risk.

“Growth investing is a strategy where you pay more now for a company that is likely to be worth much more later,” said Daniel Milan, founder and managing partner at Cornerstone Financial Services. “Growth investing is an investment strategy focused on buying stocks of companies that are expected to grow revenues, earnings or cash flow faster than the overall market, even if their shares look expensive today.”

Risks of Growth Investing

It may be tempting to see a growth stock’s recent strong performance and expect similar results in the future, but this can be a mistake.

Over longer time frames, growth stocks have not consistently outperformed value stocks. According to 2025 research by Boston-based investment management firm GMO, more than 50% of growth stocks go bankrupt compared with value stocks over a five-year period. Fewer than 40% of growth stocks have outperformed the market over time frames of five years, GMO’s calculations show.

One reason for this, Beckerman explains, is reversion to the mean. “In simple terms, companies that experience unusually high growth or profitability tend to face competitive pressure over time. New entrants, technological change, regulation or simply market saturation can all bring growth rates back toward more normal levels,” he said.

How Do You Value Growth Stocks?

Valuing growth stocks can be challenging, since their future earnings might be higher than their current, potentially low profits. Where it becomes difficult is in estimating future cash flows.

“Growth companies tend to be heavy in intangible assets (e.g., software, data, network effects, brand and human capital.) These don’t show up clearly on the balance sheet, which makes traditional metrics like book value less useful,” Beckerman said.

One valuation method that Robert R. Johnson, professor of finance at Creighton University in Omaha, Nebraska, recommends is to compare price/earnings-to-growth (PEG) ratios. You can find a growth stock’s PEG ratio by dividing the P/E ratio by the growth rate—ignoring the percent sign.

A PEG ratio of 1 is a benchmark for fair value, with higher values signaling it may be overvalued and lower values, undervalued. If a stock has a P/E of 20, then it should ideally grow at 20% or more each year.

Growth vs. Value Stocks: Which is Better?

Value stocks are investments that trade at a low price relative to their earnings or growth potential. These stocks are much more likely to pay dividends than growth stocks and tend to have lower P/E ratios than their growth stock counterparts.

While growth stocks generally represent a higher risk/reward ratio, value stocks tend to represent companies with slower, but more stable, growth.

Experts have varied opinions about whether growth or value stocks are superior. Much depends on your financial goals, timeline and risk tolerance.

“Being a value investor is no different from seeking value in the purchase of any good or service. We generally prefer to buy things when they are selling at a discount and not when they are selling at a premium,” Johnson says.

Mike Martin, vice president of market strategy at TradingBlock, an online brokerage, says it largely depends on your risk tolerance and the interest rate environment. “Younger investors who can take on more risk are often better at allocating more toward growth. Low-interest environments often favor growth companies because money is cheap. The cost to borrow is low, and those savings can flow through to higher investment, expansion and ultimately stronger earnings growth.”

Value stocks have outperformed growth stocks over very long periods because investors can overpay for growth or fail to take advantage of out-of-favor businesses with lower valuations. The past decade has been an exception, since large-cap technology growth stocks have dominated returns. However, overpaying for growth has historically led to disappointing outcomes.

“Every investment, even a growth stock, ultimately should consider a reasonable assessment of what the business is worth today based on its future cash flows,” Beckerman says.

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