Growth stocks have been top performers in 2023 after lagging behind value and dividend stocks in 2022. And despite the signs of a slowing global economy, growth stocks are expected to maintain their momentum in the near future, thanks to the sharp pullback in this asset class last year. 

Two top growth stocks worth considering are Confluent (CFLT 4.92%) and NovoCure (NVCR -4.20%). Confluent is a data-streaming platform that enables real-time data processing and analysis; NovoCure is a medical device company.

Both of these companies have strong potential and are trading at attractive valuations compared to their historical highs. Read on to find out more.

A hand drawing an upward trending curve.

Image source: Getty Images.

Confluent: Data streaming for the modern enterprise

Confluent is a cloud-based platform that enables businesses to stream data from various sources and applications in real time. Its platform is based on Apache Kafka, open-source software that is widely used for data integration and analysis.

Confluent's platform simplifies the use of Kafka and adds features such as security, scalability, reliability, and integration with other cloud services.

The platform is used by more than 4,830 customers across various industries, including retail, banking, gaming, media, and healthcare. Among its notable customers are Domino's Pizza, Humana, and eBay. Confluent helps these businesses gain insights from their data, improve customer service, and innovate faster.

The company went public in June 2021 at $36 per share and reached a peak of $93.60 in November of the same year. But the stock has since fallen to around $34.60 as of this writing, mainly due to the market's rotation away from growth stocks and the company's enormous valuation during the peak of the pandemic. 

Despite these challenges, Confluent has a huge opportunity. The global data-streaming market is expected to have a compound annual growth rate of 28.9% from 2019 to 2025, according to Grand View Research. The company's internal estimates peg the commercial opportunity in real-time data streaming at over $60 billion annually.

Confluent's platform is well positioned to capture a large share of this rapidly growing market with its differentiated and scalable solution that can handle complex and diverse data streams. The company also has a reasonably strong competitive moat due to its in-house talent, although it does face stiff competition from cloud computing juggernauts like Alphabet, Amazon, and Microsoft.

The catch is that Confluent's stock isn't cheap in the traditional sense. The shares trade at over 10 times forward sales, which isn't outlandish for a top tech stock, but it also isn't a bargain from a historical perspective. 

In the longer term, however, it could be an incredible bargain. The company is growing at a blistering pace right now, and there's no reason to think it is about to slow down. Data streaming is poised to become a centerpiece in the daily operations of most large-cap companies, and Confluent has emerged as a top player in the field.

NovoCure: Time to buy the dip

NovoCure is a medical device company that develops and commercializes a noninvasive therapy called tumor treating fields (TTFields) for the treatment of solid tumors. TTFields are low-intensity electric fields that disrupt the division of cancer cells and cause them to die or become more susceptible to other treatments such as chemotherapy and radiation.

NovoCure's flagship product is Optune, a portable device that delivers TTFields to the brain through the scalp. Optune is approved by the Food and Drug Administration (FDA) for the treatment of glioblastoma (GBM), an aggressive form of brain cancer that has a median survival of less than 15 months. Optune has been shown to extend the survival of GBM patients by an average of approximately five months when used in combination with chemotherapy.

NovoCure is also developing TTFields for other types of solid tumors, such as lung cancer, pancreatic cancer, and ovarian cancer. The company has several ongoing clinical trials to evaluate the safety and efficacy of TTFields in these indications. Its pipeline could significantly expand its addressable market and diversify its revenue streams.

NovoCure's stock soared by 163.8% from January 2020 to June 2021, thanks to its strong revenue growth and positive clinical results. But the stock has since plunged 87.7% from its all-time high due to several factors such as the market's sell-off of growth stocks, the company's slowing revenue growth, and mounting concerns about prescriber enthusiasm for its novel tech.

However, the company's long-term prospects remain intact. With several late-stage trials set to read out over the next 16 months and its next set of clinical trials poised to kick off thereafter, NovoCure offers investors a tremendous amount of deep value.

Moreover, its shares are downright cheap at 5.2 times 2024 estimated sales. Top-shelf medical device stocks tend to trade at well over 10 times forward-looking sales.