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URLhttps://www.investopedia.com/the-best-growth-stocks-8783031
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Meta TitleBest Growth Stocks to Watch in August 2025
Meta DescriptionThis is our list of the best growth stocks based on their returns over the last 30 days.
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Growth stocks are companies that investors expect to outperform industry peers or the broader market in earnings, revenue, and share price increases. Unlike more established firms, which may return these profits to shareholders in the form of dividends or use them to buy back stock, growth stocks tend to reinvest these gains in expansion, research, development, and similar areas. However, although growth stocks may generate sizable returns for investors, they also carry a higher degree of risk as a result of market volatility. Growth is one key factor investors consider, along with others such as value and momentum . Below, we explore the best growth stocks to watch this month and offer a detailed explanation of our methodology for compiling this list. All data are current as of July 31, 2025. Best Growth Stocks to Watch in August 2025 Ticker   Company Sector Market Cap ($B) Price ($) 30-Day Return (%) ABVX Abivax SA Health Technology 5.30 71.77 816.60 NEGG Newegg Commerce, Inc. Retail Trade 1.24 63.79 295.47 CELC Celcuity Inc. Health Technology 1.52 39.17 187.98 MENS Jyong Biotech Ltd. Health Technology 1.41 19.06 104.95 ZIMV ZimVie Inc. Health Technology 0.53 18.79 101.39 SBET SharpLink Gaming, Inc. Commercial Services 1.88 18.81 88.67 MP MP Materials Corp. Non-energy Materials 10.89 61.50 85.58 KOD Kodiak Sciences Inc Health Technology 0.35 6.58 76.75 AMPX Amprius Technologies, Inc. Producer Manufacturing 0.84 6.93 64.61 ZBIO Zenas BioPharma, Inc. Health Technology 0.66 15.71 62.97 RUA Russell 3000 N/A N/A 3,601.46 2.40 Source: TradingView.com Growth Stocks in the Current Market Environment In general, growth stocks tend to perform better in periods of economic expansion when the cost of borrowing is low. Though inflation is lower than it has been in recent years, higher interest rates and slowing economic growth mean that the current environment may not be ideal for these firms. That said, not all growth stocks benefit from the same market conditions . For example, companies that enjoy a particular competitive edge within their industries or a dominant position in the market may be more likely to grow regardless of the macroeconomic environment. Similarly, firms in a hot industry that is experiencing significant growth may also outperform independently of other factors. A recent example has been technology stocks focused on AI, although an industry sell-off following the unveiling of a competitive AI platform by Chinese firm DeepSeek in January 2025 is a reminder that these conditions may change suddenly. Health technology and biotech firms are often present in lists of top growth stocks thanks to their potential for massive breakouts following strong data about a new product or launches of a blockbuster drug or piece of equipment. Despite turbulence due to inflation and a slowdown in product launches, this sector may still be poised for significant growth due to an aging population and increased health care spending, with national health expenditures climbing to $4.9 trillion in 2023. How We Chose the Best Growth Stocks In our growth stocks screen, we focused on companies listed on either the Nasdaq or the New York Stock Exchange . To ensure that the firms we screened are well-established, we excluded stocks trading under $5 per share, those with a market capitalization under $300 million, and any with a daily trading volume under 100,000. Additionally, companies with growth in excess of 1,000% were excluded as outliers. From this list, we selected the stocks with the highest 30-day returns to complete our ranking. In many cases, companies with a strong recent history of outperformance relative to industry peers or the broader market have built momentum thanks to positive company or external news, favorable market sentiment , or appealing technicals. If these conditions remain the same, these companies may experience continued growth in the future, though past performance is not an indicator of future returns. How to Invest Wisely in Growth Stocks Besides 30-day return, there are many key financial ratios that are helpful to use to identify potential growth stock investments. Using multiple metrics provides a fuller picture of the benefits different candidates offer, their financial positions, and how the market views them with respect to potential future gains. Earnings Per Share (EPS) Growth Earnings per share (EPS) growth is a measure of the percentage increase in a company's earnings per share over a given period, typically year-over-year. Positive or accelerating EPS growth indicates underlying financial health and suggests the potential for future returns. Price-to-Earnings (P/E) Ratio Price-to-earnings (P/E) ratio is a comparison of a company's stock price and its EPS. Higher P/E ratios suggest that investors are bullish about a company but may also signal that it is overvalued. On the other hand, a low P/E ratio may mean that a stock is undervalued relative to the industry or the broader market, or that investors are not especially optimistic about its prospects. Price-to-Book (P/B) Ratio Price-to-book (P/B) ratio is a measure of a firm's market value against its book value, or the net value of the assets on its balance sheet. Some contrarian investors believe that a low P/B ratio indicates an undervalued stock that may have growth potential. However, P/B ratios can vary significantly from industry to industry, so it's important to take stock of how a particular company compares with its peers. How to Find Growth Stocks Investors don't have one single method for identifying promising growth stocks. Factors such as financial health, management, returns, and market position relative to industry peers are all helpful to consider. Looking at a prospective growth stock investment, you should consider the company's revenue, EPS, and profit margin history. Companies with a consistent record of increasing earnings may be likely to continue to grow into the future. It's best to avoid stocks paying a dividend if you're interested in growth potential—companies paying a dividend are opting to not reinvest profits back toward investment in company growth. Identifying firms with a relative industry advantage over their peers depends upon the specific sector and industry. For instance, some industries—like health care—may be quite opaque to investors without special expertise. In other cases, it may be easier to identify a sustainable competitive edge in the form of a unique product, technology, or service that a company offers. An example of a competitive edge is NVIDIA Corp.'s ( NVDA ) data center processors, widely viewed as advantageous over rival products thanks to their system-scale integration capabilities. A company's management and corporate governance can also be helpful clues to its growth potential. How have the firm's leaders navigated challenges and taken advantage of opportunities in the past? Looking to historical earnings reports can show whether a firm has been able to meet its goals, including in the area of forecasted EPS and revenue performance. Lastly, share price performance can be an indicator of future growth potential. Look for companies that have higher stock price gains than their industry or the broader market. When making a comparison, it's helpful to benchmark a firm's performance against the Russell 1000 Index . As of July 31, 2025, the Russell 1000 had returned 2.41% in the last 30 days. The stocks in our screen above have all significantly outperformed this level, potentially suggesting the prospect of future growth as well. A metric like compound annual growth rate (CAGR) can also help to compare two companies more directly. Are These the Best Growth Stocks? It is difficult to assess which growth stocks are the "best." In reality, growth stocks in general—and these companies in particular—may not be suitable for each type of investor. Growth stocks may exhibit a higher degree of volatility than some more established, larger peers. Because many growth stocks are companies making aggressive maneuvers to expand operations, and because these moves may or may not succeed, investing in growth stocks can carry certain risks. Further, it can be difficult to predict which stocks exhibiting growth characteristics, such as the metrics identified above, will successfully generate outsized returns. Investors interested in growth stocks should keep in mind that recent performance history is not a guarantee of future returns. The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author does not own any of the above securities.
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[21 Best Places to Retire in Florida](https://www.investopedia.com/21-florida-retirement-locations-perfect-for-your-next-chapter-11892683) Table of Contents Expand Table of Contents - [Growth Stocks in the Current Market](https://www.investopedia.com/the-best-growth-stocks-8783031#toc-growth-stocks-in-the-current-market-environment) - [Methodology](https://www.investopedia.com/the-best-growth-stocks-8783031#toc-how-we-chose-the-best-growth-stocks) - [How to Invest in Growth Stocks](https://www.investopedia.com/the-best-growth-stocks-8783031#toc-how-to-invest-wisely-in-growth-stocks) - [How to Find Growth Stocks](https://www.investopedia.com/the-best-growth-stocks-8783031#toc-how-to-find-growth-stocks) - [Are These the Best Growth Stocks?](https://www.investopedia.com/the-best-growth-stocks-8783031#toc-are-these-the-best-growth-stocks) # Best Growth Stocks to Watch in August 2025 Growth stocks can be a good way to build wealth. These are some of the best growth stocks for August 2025 By [Nathan Reiff](https://www.investopedia.com/contributors/54684/) ![Nathan Reiff]() ![Nathan Reiff](https://www.investopedia.com/thmb/Ej3Z4uUrgrEmcZexulnN5BML8Kg=/200x200/filters:no_upscale\(\):max_bytes\(150000\):strip_icc\(\)/reiff_headshot-5bfc2a60c9e77c00519a70bd.jpg) [Full Bio](https://www.investopedia.com/contributors/54684/) Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016. Learn about our [editorial policies](https://www.investopedia.com/legal-4768893#editorial-policy) Updated August 01, 2025 ![The Abivax logo displayed on a smartphone screen with a blurred background showing abstract light patterns](https://www.investopedia.com/thmb/ZX14lLqeWqv59iFnvJ4s12xoH04=/1500x0/filters:no_upscale\(\):max_bytes\(150000\):strip_icc\(\)/GettyImages-2226089655-b6ae1982e5fd413a897250960c11f9dd.jpg) ![The Abivax logo displayed on a smartphone screen with a blurred background showing abstract light patterns](https://www.investopedia.com/thmb/ZX14lLqeWqv59iFnvJ4s12xoH04=/1500x0/filters:no_upscale\(\):max_bytes\(150000\):strip_icc\(\)/GettyImages-2226089655-b6ae1982e5fd413a897250960c11f9dd.jpg) SOPA Images/Getty Images Close Growth stocks are companies that investors expect to outperform industry peers or the broader market in earnings, revenue, and share price increases. Unlike more established firms, which may return these profits to shareholders in the form of dividends or use them to buy back stock, [growth stocks](https://www.investopedia.com/terms/g/growthstock.asp) tend to reinvest these gains in expansion, research, development, and similar areas. However, although growth stocks may generate sizable returns for investors, they also carry a higher degree of risk as a result of market volatility. Growth is one key factor investors consider, along with others such as [value](https://www.investopedia.com/articles/professionals/072415/value-or-growth-stocks-which-best.asp) and [momentum](https://www.investopedia.com/terms/m/momentum.asp). Below, we explore the best growth stocks to watch this month and offer a detailed explanation of our methodology for compiling this list. All data are current as of July 31, 2025. | Best Growth Stocks to Watch in August 2025 | | | | | | |---|---|---|---|---|---| | **Ticker** | **Company** | **Sector** | **Market Cap (\$B)** | **Price (\$)** | **30-Day Return (%)** | | [ABVX](https://www.investopedia.com/markets/quote?tvwidgetsymbol=ABVX) | Abivax SA | Health Technology | 5\.30 | 71\.77 | 816\.60 | | [NEGG](https://www.investopedia.com/markets/quote?tvwidgetsymbol=NEGG) | Newegg Commerce, Inc. | Retail Trade | 1\.24 | 63\.79 | 295\.47 | | [CELC](https://www.investopedia.com/markets/quote?tvwidgetsymbol=CELC) | Celcuity Inc. | Health Technology | 1\.52 | 39\.17 | 187\.98 | | [MENS](https://www.investopedia.com/markets/quote?tvwidgetsymbol=MENS) | Jyong Biotech Ltd. | Health Technology | 1\.41 | 19\.06 | 104\.95 | | [ZIMV](https://www.investopedia.com/markets/quote?tvwidgetsymbol=ZIMV) | ZimVie Inc. | Health Technology | 0\.53 | 18\.79 | 101\.39 | | [SBET](https://www.investopedia.com/markets/quote?tvwidgetsymbol=SBET) | SharpLink Gaming, Inc. | Commercial Services | 1\.88 | 18\.81 | 88\.67 | | [MP](https://www.investopedia.com/markets/quote?tvwidgetsymbol=MP) | MP Materials Corp. | Non-energy Materials | 10\.89 | 61\.50 | 85\.58 | | [KOD](https://www.investopedia.com/markets/quote?tvwidgetsymbol=KOD) | Kodiak Sciences Inc | Health Technology | 0\.35 | 6\.58 | 76\.75 | | [AMPX](https://www.investopedia.com/markets/quote?tvwidgetsymbol=AMPX) | Amprius Technologies, Inc. | Producer Manufacturing | 0\.84 | 6\.93 | 64\.61 | | [ZBIO](https://www.investopedia.com/markets/quote?tvwidgetsymbol=ZBIO) | Zenas BioPharma, Inc. | Health Technology | 0\.66 | 15\.71 | 62\.97 | | [RUA](https://www.investopedia.com/markets/quote?tvwidgetsymbol=RUA) | Russell 3000 | N/A | N/A | 3,601.46 | 2\.40 | Source: TradingView.com ## Growth Stocks in the Current Market Environment In general, growth stocks tend to perform better in periods of economic expansion when the cost of borrowing is low. Though inflation is lower than it has been in recent years, higher [interest rates](https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/) and slowing economic growth mean that the current environment may not be ideal for these firms. That said, not all [growth stocks benefit from the same market conditions](https://www.investopedia.com/stocks-that-grew-more-than-bitcoin-8716756). For example, companies that enjoy a particular competitive edge within their industries or a dominant position in the market may be more likely to grow regardless of the macroeconomic environment. Similarly, firms in a hot industry that is experiencing significant growth may also outperform independently of other factors. A recent example has been technology stocks focused on AI, although an [industry sell-off](https://www.investopedia.com/tech-stocks-sinking-on-deepseek-threat-nvidia-update-8780706) following the unveiling of a competitive AI platform by Chinese firm [DeepSeek](https://www.investopedia.com/what-is-deepseek-chinese-ai-startup-that-spurred-a-stock-selloff-nvidia-update-8780896) in January 2025 is a reminder that these conditions may change suddenly. Health technology and biotech firms are often present in lists of top growth stocks thanks to their potential for massive breakouts following strong data about a new product or launches of a blockbuster drug or piece of equipment. Despite turbulence due to inflation and a slowdown in product launches, this sector may still be poised for significant growth due to an aging population and increased health care spending, with national health expenditures climbing to \$4.9 trillion in 2023. ## How We Chose the Best Growth Stocks In our growth stocks screen, we focused on companies listed on either the [Nasdaq](https://www.investopedia.com/terms/n/nasdaq.asp) or the [New York Stock Exchange](https://www.investopedia.com/terms/n/nyse.asp). To ensure that the firms we screened are well-established, we excluded stocks trading under \$5 per share, those with a market capitalization under \$300 million, and any with a daily trading volume under 100,000. Additionally, companies with growth in excess of 1,000% were excluded as outliers. From this list, we selected the stocks with the highest 30-day returns to complete our ranking. In many cases, companies with a strong recent history of outperformance relative to industry peers or the broader market have built momentum thanks to positive company or external news, favorable [market sentiment](https://www.investopedia.com/terms/m/marketsentiment.asp), or appealing technicals. If these conditions remain the same, these companies may experience continued growth in the future, though past performance is not an indicator of future returns. ## How to Invest Wisely in Growth Stocks Besides 30-day return, there are many key [financial ratios](https://www.investopedia.com/financial-edge/0910/6-basic-financial-ratios-and-what-they-tell-you.aspx) that are helpful to use to identify potential growth stock investments. Using multiple [metrics](https://www.investopedia.com/articles/investing/010616/5-characteristics-good-growth-stocks.asp) provides a fuller picture of the benefits different candidates offer, their financial positions, and how the market views them with respect to potential future gains. ### Earnings Per Share (EPS) Growth [Earnings per share (EPS)](https://www.investopedia.com/terms/e/eps.asp) growth is a measure of the percentage increase in a company's earnings per share over a given period, typically year-over-year. Positive or accelerating EPS growth indicates underlying financial health and suggests the potential for future returns. ### Price-to-Earnings (P/E) Ratio [Price-to-earnings (P/E) ratio](https://www.investopedia.com/terms/p/price-earningsratio.asp) is a comparison of a company's stock price and its EPS. Higher P/E ratios suggest that investors are bullish about a company but may also signal that it is overvalued. On the other hand, a low P/E ratio may mean that a stock is undervalued relative to the industry or the broader market, or that investors are not especially optimistic about its prospects. ### Price-to-Book (P/B) Ratio [Price-to-book (P/B) ratio](https://www.investopedia.com/ask/answers/040815/what-average-pricetobook-ratio-bank.asp) is a measure of a firm's market value against its book value, or the net value of the assets on its balance sheet. Some [contrarian](https://www.investopedia.com/articles/financial-theory/08/contrarian-investing.asp) investors believe that a low P/B ratio indicates an undervalued stock that may have growth potential. However, P/B ratios can vary significantly from industry to industry, so it's important to take stock of how a particular company compares with its peers. ## How to Find Growth Stocks Investors don't have one single method for identifying promising growth stocks. Factors such as financial health, management, returns, and market position relative to industry peers are all helpful to consider. Looking at a prospective growth stock investment, you should consider the company's revenue, EPS, and profit margin history. Companies with a consistent record of increasing earnings may be likely to continue to grow into the future. It's best to avoid stocks paying a dividend if you're interested in growth potential—companies paying a dividend are opting to not reinvest profits back toward investment in company growth. Identifying firms with a relative industry advantage over their peers depends upon the specific sector and industry. For instance, some industries—like health care—may be quite opaque to investors without special expertise. In other cases, it may be easier to identify a sustainable competitive edge in the form of a unique product, technology, or service that a company offers. An example of a competitive edge is NVIDIA Corp.'s ([NVDA](https://www.investopedia.com/markets/quote?tvwidgetsymbol=NVDA)) data center processors, widely viewed as advantageous over rival products thanks to their system-scale integration capabilities. A company's management and corporate governance can also be helpful clues to its growth potential. How have the firm's leaders navigated challenges and taken advantage of opportunities in the past? Looking to historical earnings reports can show whether a firm has been able to meet its goals, including in the area of forecasted EPS and revenue performance. Lastly, share price performance can be an indicator of future growth potential. Look for companies that have higher stock price gains than their industry or the broader market. When making a comparison, it's helpful to benchmark a firm's performance against the [Russell 1000 Index](https://www.investopedia.com/terms/r/russell_1000index.asp). As of July 31, 2025, the Russell 1000 had returned 2.41% in the last 30 days. The stocks in our screen above have all significantly outperformed this level, potentially suggesting the prospect of future growth as well. A metric like [compound annual growth rate (CAGR)](https://www.investopedia.com/terms/c/cagr.asp) can also help to compare two companies more directly. ## Are These the Best Growth Stocks? It is difficult to assess which growth stocks are the "best." In reality, growth stocks in general—and these companies in particular—may not be suitable for each type of investor. Growth stocks may exhibit a higher degree of volatility than some more established, larger peers. Because many growth stocks are companies making aggressive maneuvers to expand operations, and because these moves may or may not succeed, investing in growth stocks can carry certain risks. Further, it can be difficult to predict which stocks exhibiting growth characteristics, such as the metrics identified above, will successfully generate outsized returns. Investors interested in growth stocks should keep in mind that recent performance history is not a guarantee of future returns. *The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our [warranty and liability disclaimer](https://www.investopedia.com/legal-4768893#toc-warranty-and-liability-disclaimer) for more info. As of the date this article was written, the author does not own any of the above securities.* Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our [editorial policy.](https://www.investopedia.com/legal-4768893#EditorialPolicy) 1. Centers for Medicare & Medicaid Services. “[NHE Fact Sheet](https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/nhe-fact-sheet).” 2. Yahoo! Finance. "[Analyst Explains NVIDIA’s (NVDA) Competitive Advantage Over AMD](https://finance.yahoo.com/news/analyst-explains-nvidia-nvda-competitive-125828304.html)." Compare Accounts Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Get personalized, AI-powered answers built on 27+ years of trusted expertise. ASK Read more - [Investing](https://www.investopedia.com/investing-4427685) - [Stocks](https://www.investopedia.com/stocks-4427785) - [Growth Stocks](https://www.investopedia.com/growth-stocks-4689743) Partner Links Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. 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Growth stocks are companies that investors expect to outperform industry peers or the broader market in earnings, revenue, and share price increases. Unlike more established firms, which may return these profits to shareholders in the form of dividends or use them to buy back stock, [growth stocks](https://www.investopedia.com/terms/g/growthstock.asp) tend to reinvest these gains in expansion, research, development, and similar areas. However, although growth stocks may generate sizable returns for investors, they also carry a higher degree of risk as a result of market volatility. Growth is one key factor investors consider, along with others such as [value](https://www.investopedia.com/articles/professionals/072415/value-or-growth-stocks-which-best.asp) and [momentum](https://www.investopedia.com/terms/m/momentum.asp). Below, we explore the best growth stocks to watch this month and offer a detailed explanation of our methodology for compiling this list. All data are current as of July 31, 2025. | Best Growth Stocks to Watch in August 2025 | | | | | | |---|---|---|---|---|---| | **Ticker** | **Company** | **Sector** | **Market Cap (\$B)** | **Price (\$)** | **30-Day Return (%)** | | [ABVX](https://www.investopedia.com/markets/quote?tvwidgetsymbol=ABVX) | Abivax SA | Health Technology | 5\.30 | 71\.77 | 816\.60 | | [NEGG](https://www.investopedia.com/markets/quote?tvwidgetsymbol=NEGG) | Newegg Commerce, Inc. | Retail Trade | 1\.24 | 63\.79 | 295\.47 | | [CELC](https://www.investopedia.com/markets/quote?tvwidgetsymbol=CELC) | Celcuity Inc. | Health Technology | 1\.52 | 39\.17 | 187\.98 | | [MENS](https://www.investopedia.com/markets/quote?tvwidgetsymbol=MENS) | Jyong Biotech Ltd. | Health Technology | 1\.41 | 19\.06 | 104\.95 | | [ZIMV](https://www.investopedia.com/markets/quote?tvwidgetsymbol=ZIMV) | ZimVie Inc. | Health Technology | 0\.53 | 18\.79 | 101\.39 | | [SBET](https://www.investopedia.com/markets/quote?tvwidgetsymbol=SBET) | SharpLink Gaming, Inc. | Commercial Services | 1\.88 | 18\.81 | 88\.67 | | [MP](https://www.investopedia.com/markets/quote?tvwidgetsymbol=MP) | MP Materials Corp. | Non-energy Materials | 10\.89 | 61\.50 | 85\.58 | | [KOD](https://www.investopedia.com/markets/quote?tvwidgetsymbol=KOD) | Kodiak Sciences Inc | Health Technology | 0\.35 | 6\.58 | 76\.75 | | [AMPX](https://www.investopedia.com/markets/quote?tvwidgetsymbol=AMPX) | Amprius Technologies, Inc. | Producer Manufacturing | 0\.84 | 6\.93 | 64\.61 | | [ZBIO](https://www.investopedia.com/markets/quote?tvwidgetsymbol=ZBIO) | Zenas BioPharma, Inc. | Health Technology | 0\.66 | 15\.71 | 62\.97 | | [RUA](https://www.investopedia.com/markets/quote?tvwidgetsymbol=RUA) | Russell 3000 | N/A | N/A | 3,601.46 | 2\.40 | Source: TradingView.com ## Growth Stocks in the Current Market Environment In general, growth stocks tend to perform better in periods of economic expansion when the cost of borrowing is low. Though inflation is lower than it has been in recent years, higher [interest rates](https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/) and slowing economic growth mean that the current environment may not be ideal for these firms. That said, not all [growth stocks benefit from the same market conditions](https://www.investopedia.com/stocks-that-grew-more-than-bitcoin-8716756). For example, companies that enjoy a particular competitive edge within their industries or a dominant position in the market may be more likely to grow regardless of the macroeconomic environment. Similarly, firms in a hot industry that is experiencing significant growth may also outperform independently of other factors. A recent example has been technology stocks focused on AI, although an [industry sell-off](https://www.investopedia.com/tech-stocks-sinking-on-deepseek-threat-nvidia-update-8780706) following the unveiling of a competitive AI platform by Chinese firm [DeepSeek](https://www.investopedia.com/what-is-deepseek-chinese-ai-startup-that-spurred-a-stock-selloff-nvidia-update-8780896) in January 2025 is a reminder that these conditions may change suddenly. Health technology and biotech firms are often present in lists of top growth stocks thanks to their potential for massive breakouts following strong data about a new product or launches of a blockbuster drug or piece of equipment. Despite turbulence due to inflation and a slowdown in product launches, this sector may still be poised for significant growth due to an aging population and increased health care spending, with national health expenditures climbing to \$4.9 trillion in 2023. ## How We Chose the Best Growth Stocks In our growth stocks screen, we focused on companies listed on either the [Nasdaq](https://www.investopedia.com/terms/n/nasdaq.asp) or the [New York Stock Exchange](https://www.investopedia.com/terms/n/nyse.asp). To ensure that the firms we screened are well-established, we excluded stocks trading under \$5 per share, those with a market capitalization under \$300 million, and any with a daily trading volume under 100,000. Additionally, companies with growth in excess of 1,000% were excluded as outliers. From this list, we selected the stocks with the highest 30-day returns to complete our ranking. In many cases, companies with a strong recent history of outperformance relative to industry peers or the broader market have built momentum thanks to positive company or external news, favorable [market sentiment](https://www.investopedia.com/terms/m/marketsentiment.asp), or appealing technicals. If these conditions remain the same, these companies may experience continued growth in the future, though past performance is not an indicator of future returns. ## How to Invest Wisely in Growth Stocks Besides 30-day return, there are many key [financial ratios](https://www.investopedia.com/financial-edge/0910/6-basic-financial-ratios-and-what-they-tell-you.aspx) that are helpful to use to identify potential growth stock investments. Using multiple [metrics](https://www.investopedia.com/articles/investing/010616/5-characteristics-good-growth-stocks.asp) provides a fuller picture of the benefits different candidates offer, their financial positions, and how the market views them with respect to potential future gains. ### Earnings Per Share (EPS) Growth [Earnings per share (EPS)](https://www.investopedia.com/terms/e/eps.asp) growth is a measure of the percentage increase in a company's earnings per share over a given period, typically year-over-year. Positive or accelerating EPS growth indicates underlying financial health and suggests the potential for future returns. ### Price-to-Earnings (P/E) Ratio [Price-to-earnings (P/E) ratio](https://www.investopedia.com/terms/p/price-earningsratio.asp) is a comparison of a company's stock price and its EPS. Higher P/E ratios suggest that investors are bullish about a company but may also signal that it is overvalued. On the other hand, a low P/E ratio may mean that a stock is undervalued relative to the industry or the broader market, or that investors are not especially optimistic about its prospects. ### Price-to-Book (P/B) Ratio [Price-to-book (P/B) ratio](https://www.investopedia.com/ask/answers/040815/what-average-pricetobook-ratio-bank.asp) is a measure of a firm's market value against its book value, or the net value of the assets on its balance sheet. Some [contrarian](https://www.investopedia.com/articles/financial-theory/08/contrarian-investing.asp) investors believe that a low P/B ratio indicates an undervalued stock that may have growth potential. However, P/B ratios can vary significantly from industry to industry, so it's important to take stock of how a particular company compares with its peers. ## How to Find Growth Stocks Investors don't have one single method for identifying promising growth stocks. Factors such as financial health, management, returns, and market position relative to industry peers are all helpful to consider. Looking at a prospective growth stock investment, you should consider the company's revenue, EPS, and profit margin history. Companies with a consistent record of increasing earnings may be likely to continue to grow into the future. It's best to avoid stocks paying a dividend if you're interested in growth potential—companies paying a dividend are opting to not reinvest profits back toward investment in company growth. Identifying firms with a relative industry advantage over their peers depends upon the specific sector and industry. For instance, some industries—like health care—may be quite opaque to investors without special expertise. In other cases, it may be easier to identify a sustainable competitive edge in the form of a unique product, technology, or service that a company offers. An example of a competitive edge is NVIDIA Corp.'s ([NVDA](https://www.investopedia.com/markets/quote?tvwidgetsymbol=NVDA)) data center processors, widely viewed as advantageous over rival products thanks to their system-scale integration capabilities. A company's management and corporate governance can also be helpful clues to its growth potential. How have the firm's leaders navigated challenges and taken advantage of opportunities in the past? Looking to historical earnings reports can show whether a firm has been able to meet its goals, including in the area of forecasted EPS and revenue performance. Lastly, share price performance can be an indicator of future growth potential. Look for companies that have higher stock price gains than their industry or the broader market. When making a comparison, it's helpful to benchmark a firm's performance against the [Russell 1000 Index](https://www.investopedia.com/terms/r/russell_1000index.asp). As of July 31, 2025, the Russell 1000 had returned 2.41% in the last 30 days. The stocks in our screen above have all significantly outperformed this level, potentially suggesting the prospect of future growth as well. A metric like [compound annual growth rate (CAGR)](https://www.investopedia.com/terms/c/cagr.asp) can also help to compare two companies more directly. ## Are These the Best Growth Stocks? It is difficult to assess which growth stocks are the "best." In reality, growth stocks in general—and these companies in particular—may not be suitable for each type of investor. Growth stocks may exhibit a higher degree of volatility than some more established, larger peers. Because many growth stocks are companies making aggressive maneuvers to expand operations, and because these moves may or may not succeed, investing in growth stocks can carry certain risks. Further, it can be difficult to predict which stocks exhibiting growth characteristics, such as the metrics identified above, will successfully generate outsized returns. Investors interested in growth stocks should keep in mind that recent performance history is not a guarantee of future returns. *The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our [warranty and liability disclaimer](https://www.investopedia.com/legal-4768893#toc-warranty-and-liability-disclaimer) for more info. As of the date this article was written, the author does not own any of the above securities.*
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