What Is a Growth Stock?

By Catherine Brock – Updated Feb 22, 2025 at 9:31 AM

Key Points

Growth stocks aim for rapid sales and earnings increases, preferring reinvestment over dividends.
Characteristics key to growth stocks include competitive advantages and a focus on innovation.
Successful growth investors are rational, methodical, risk-tolerant, and patient.

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Person points to arrow trending up on bar graph. — Image source: Getty Images.

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Large addressable market. While Nvidia made its name in gaming chips, its products are used in several industries today. The healthcare, data center, and AI industries are all opportunities for the chipmaker. The company has estimated its total addressable market at $1 trillion.

Nvidia has delivered annualized returns topping 45% for its shareholders over the last 15 years. Analysts expect continued growth from Nvidia stock as the chipmaker leverages its leading position in AI. The company's P/E ratio of 92.48 reflects that optimism.

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About the Author

Catherine grew up in Southern California wearing a lot of black and trying to perfect the art of sarcasm. Prior to joining The Fool as a contract writer, Catherine was climbing the corporate ladder in marketing roles and dabbling in too many side hustles. When she's not writing, she can be found riding a horse in the country or shopping online for clothes.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Catherine Brock has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Nvidia, and Tesla. The Motley Fool has a disclosure policy.