It has been a surprising year for growth stocks as the Nasdaq Composite index roared back after losing a third of its value last year.

The bellwether technology stock index delivered its best first-half performance in four decades as it jumped 32%, although it has yet to recover last year's losses. Several stocks performed even better than the index as they soared to new 52-week highs on the back of optimism and enduring catalysts.

A word of caution is warranted, though. Investors need to ensure that business growth keeps pace with the stock price -- otherwise, you may end up buying into a value trap.

It is important to study the business behind the stock to determine if it has the attributes to be a long-term winner and not a short-term star. Look at the company's competitive moat, its market position within its industry, growth plans, and prospects for increasing both revenue and profits in the long run.

The three stocks below ticked all these boxes, and though their share prices soared in the past few months, they still qualify as potential long-term compounders.

Driver looking at cellphone while charging electric car.

Image source: Getty Images.

1. Meta Platforms

Meta Platforms (META 1.05%) has been one of the biggest winners this year as the social media giant saw its share price more than double year to date.

Investors became more optimistic about the company after CEO Mark Zuckerberg declared 2023 a "Year of Efficiency" and went about slashing costs to improve profitability. By focusing more on prudence rather than growth, the business looks set to emerge stronger after a punishing 2022.

Meta Platforms initiated one of the largest technology layoffs of last year with more than 11,000 employees. 2023 saw another 10,000 jobs eliminated, bringing its headcount back to the level of mid-2021. These cuts were necessary to right-size the business after demand fell.

Earnings for the first quarter of 2023 still saw operating and net income fall 15% and 24% year over year, respectively, but investors believe they see light at the end of the tunnel.

On a positive note, daily and average monthly users have continued to trend upward, rising by 3.9% and 1.8% year over year, respectively, to 2 billion and 3 billion. 

And just this month, Meta Platforms launched Threads, a text-based social media platform that is a direct competitor to Twitter. After an explosive week where signups topped 100 million, the app has seen daily active users fall to around 13 million, still an impressive figure considering this is a new product.

It may take more time for Threads to gain traction, but Meta Platforms has a good track record of monetizing its platforms, and this new launch could open up an additional revenue stream.

2. Netflix

Netflix (NFLX -1.03%) continues to rule the roost as one of the most-watched streaming TV services. Its market leadership is evident as it holds an impressive 8.2% share of U.S. television screen time, according to research firm Nielsen, with competitors Amazon Prime and Disney+ far down the ladder at 3.2% and 2%, respectively.

The company's wide content slate of movies and TV series increases its attractiveness and cements customer loyalty. Its titles cover numerous genres and multiple countries around the world. 

Netflix demonstrated the power of its growth strategy by adding close to 5.9 million paying members in its second-quarter earnings. Both revenue and net income ghained 2.7% and 3.3%, respectively, to $8.2 billion and $1.5 billion during the quarter, and the business also churned out a positive free cash flow of $1.3 billion.

Meanwhile, the company's recent crackdown on account sharing resulted in a rush of signups that will continue into the next quarter. Also, cancellations were low as Netflix converted more households into full-paying members.

The crackdown is being applied to remaining countries, and Netflix is tweaking its fees for different regions and price sensitivity.

In addition, Netflix's ad-supported tier is a runaway success, with membership nearly doubling since the first quarter.

Netflix's strong attributes should allow it to continue dominating streaming TV as it continues to grow membership and generate copious levels of free cash flow.

3. Tesla

Tesla (TSLA -8.78%) is an electric vehicle manufacturer that has seen its market capitalization more than double since the start of this year.

The company reported its highest-ever quarterly revenue at $24.9 billion in 2023's second quarter and also posted its best production and delivery numbers.

Despite cutting prices in Q1 and the early part of Q2, Tesla still reported a respectable operating margin of 9.6%, with operating income dipping just 3% year over year.

The good news is that net income climbed 20% year over year while free cash flow soared 62% year over year to hit $1 billion. 

There could be more good news to come, as Tesla said its first Cybertruck electric pickup was built in Texas. The truck is the company's fifth passenger vehicle and adds a potential new revenue stream.

Tesla's planned gigafactory in Mexico also seems to be progressing smoothly, with permits granted for construction. The new factory could be ready by the Q1 2025 and further increase Tesla's manufacturing capacity.

CEO Elon Musk has also unveiled an ambitious plan to invest in artificial intelligence for Tesla's self-driving cars, as well as spend more than $1 billion on its Project Dojo supercomputer by the end of next year. This project seeks to create autonomous driving software that can handle massive amounts of data.