InsiderFlow › Glossary › What are growth stocks?

What are growth stocks?

Growth stocks are shares of companies growing much faster than the market: you pay up today betting on tomorrow's profits.

The growth investor accepts high multiples (P/E of 40, 60, even 100) expecting earnings growth to "deflate" them quickly. Classic examples: Amazon, Tesla, Nvidia, Shopify in their expansion phases.

The risk is disappointment: when a growth company slows, the market strips its premium fast and the stock can halve while remaining a good business. High interest rates hurt these stocks most, because they shift value toward the present.

Concrete example

Nvidia traded at "absurd" multiples for years — and whoever paid them still profited, because earnings grew even faster than the price.

How you see it in InsiderFlow

On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.

Frequently asked questions

Does growth mean tech?

Often but not only: healthcare, luxury and consumer sectors have their growth names too. The criterion is the growth rate, not the sector.

When do growth stocks suffer?

When rates rise or growth disappoints: 2022 punished them with 50–80% declines.