Please ensure Javascript is enabled for purposes of website accessibility

These 2 Beaten-Down Growth Stocks Are Finally Seeing Things Go Right

By Dan Caplinger - Jul 9, 2021 at 5:47PM

Key Points

  • Stock markets reached record highs on Friday.
  • Some growth stocks saw their shares take a hit earlier this year.
  • Two stocks in particular saw nice rebounds from recent declines.

Motley Fool Issues Rare “All In” Buy Alert

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It can take time, but great companies shine in the long run.

The stock market put in a strong showing on Friday, sending the S&P 500 (^GSPC -0.16%) and Nasdaq Composite (^IXIC 0.00%) to new record levels. The Dow Jones Industrial Average (^DJI 0.23%) also saw nice gains for the day.


Percentage Change

Point Change




S&P 500



Nasdaq Composite



Data source: Yahoo! Finance.

One thing that has helped reestablish the bull market on Wall Street has been a rebound in high-growth stocks . Earlier this year, the investing thesis for many fast-growing companies got called into question by changing macroeconomic conditions. Those adverse conditions sent shares of Snowflake (SNOW 2.97%) and Chewy (CHWY 2.80%) sharply lower. However, both stocks were up significantly on Friday, and it looks like investors are finally recognizing the potential they have to generate further gains in the future.

Let it Snowflake

For many investors, Snowflake has been a colossal disappointment. The stock enjoyed huge notoriety during the run-up to its initial public offering (IPO), but after a huge gain in its opening days of trading, Snowflake's shares have fallen significantly and remain well below their best levels.

However, shares of Snowflake were up nearly 8% on Friday. The day featured solid gains for a number of high-quality growth stocks, and it's easy to understand why investors are willing to put Snowflake into this category. The company's emphasis on providing a platform that takes data and uses the power of cloud computing to unlock its true value has been part of the accelerating trend toward digital transformation among top businesses around the world. Snowflake has been able to attract huge numbers of new customers while getting its 4,500 existing clients to take greater advantage of its platform over time. With more than 100 customers generating $1 million or more in annual sales and a net revenue-retention rate of 168%, Snowflake is in its prime.

Because so much of Snowflake's growth will happen well in the future, it's hard for investors to put a fair price on the stock. They should expect more volatility, but Snowflake's fundamental business has never looked stronger.

Chew on this

Meanwhile, shares of Chewy were up more than 5% Friday. The online pet-products specialist capitalized on a rising number of stay-at-home pet parents during the pandemic, but now, investors seem to see more promise even as conditions begin to go back to how they were before COVID-19 broke out.

Chewy has plenty of growth drivers that have helped entice new customers. Its Autoship program ensures that pet owners always have the supplies and consumables they need when they need them. The program also helps to make Chewy's own sales more predictable. In addition, Chewy has increased the scope of the products it offers through its website in order to meet all the needs of its top customers.

Veterinarian examines a dog in an exam room.

Image source: Getty Images.

Perhaps most impressively, though, Chewy is pushing hard with its pet telehealth service. Regardless of the pandemic, many pet owners like the convenience of telehealth for pets, especially given the anxiety and stress that taking indoor pets to veterinary hospitals causes. With pet health being a $30 billion market, Chewy is smart to try to make inroads now.

People love their pets, and they're willing to spend money to make sure their pets are healthy and happy. Chewy gives those pet owners exactly what they want, and as it does its job even better, shareholders stand to benefit.

Dan Caplinger owns shares of Snowflake Inc. The Motley Fool owns shares of and recommends Snowflake Inc. The Motley Fool recommends Chewy, Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Snowflake Inc. Stock Quote
Snowflake Inc.
$165.53 (2.97%) $4.77
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$32,803.47 (0.23%) $76.65
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$4,145.19 (-0.16%) $-6.75
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$12,720.58 (0.00%) $0.00
Chewy, Inc. Stock Quote
Chewy, Inc.
$44.44 (2.80%) $1.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.