The stock market put in a strong showing on Friday, sending the S&P 500 (^GSPC 0.25%) and Nasdaq Composite (^IXIC 0.22%) to new record levels. The Dow Jones Industrial Average (^DJI 0.17%) also saw nice gains for the day.


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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 -1.26%) and Chewy (CHWY 2.58%) 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.