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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
Stock from a company expected to grow faster than average. Often no dividends.
Why It Matters
Growth stocks are where fortunes are made - and lost. Amazon grew from $18 to $3,500+ (before splits). Netflix went from $15 to $700. But for every Amazon, there are dozens of failed growth stories. These companies reinvest all profits into expansion instead of paying dividends, betting that future growth will reward shareholders.
Key Points
- Growth stocks typically have high P/E ratios (50-100+) because investors pay up for expected future earnings
- They're more volatile - during 2022, many growth stocks fell 60-80% while the S&P 500 dropped 20%
- Classic growth sectors: technology, biotech, electric vehicles, cloud computing
Related Terms
Common Questions
Stock from a company expected to grow faster than average. Often no dividends. Growth stocks are where fortunes are made - and lost. Amazon grew from $18 to $3,500+ (before splits).
Growth stocks are where fortunes are made - and lost. Amazon grew from $18 to $3,500+ (before splits). Netflix went from $15 to $700. But for every Amazon, there are dozens of failed growth stories. These companies reinvest all profits into expansion instead of paying dividends, betting that future growth will reward shareholders.
Growth stocks typically have high P/E ratios (50-100+) because investors pay up for expected future earnings
They're more volatile - during 2022, many growth stocks fell 60-80% while the S&P 500 dropped 20%
Classic growth sectors: technology, biotech, electric vehicles, cloud computing