While the prospect of higher rates weighs on markets, it might be time to take a closer look at some of the best-rated growth stocks. Growth stocks are outperforming in 2023 after being hammered by Wall Street last year. The Nasdaq Composite is up more than 8% this year as investors piled into riskier names after some signs of easing inflation last month. On the other hand, the Dow Jones Industrial Average is negative for the year, while the S & P 500 managed to gain more than 2%. Of course, there are risks ahead as investors digest Friday’s hot inflation report, which could mean higher interest rates from the Federal Reserve. The personal consumption expenditure price index, the central bank’s preferred measure of inflation, showed that prices rose more than expected in January. Still, for investors looking for growth stocks to outperform the S&P 500 this year, there are some highly rated names, according to Morningstar data. These stocks have at least four stars, have a market cap of $5 billion or more, and have a total return of more than 4.5%. Here are the names. Booking Holdings made the list. The online travel company was recently named by Goldman Sachs as having a strong track record of expanding margins. The stock is up 20% this year. The payment company Block also meets the criteria. Shares rose slightly on Friday after Block reported fourth-quarter earnings that showed strong growth in gross profit, although profit beat expectations. Megacap tech stocks Amazon and Microsoft made the list. Both firms earned four stars from Morningstar, and their shares are up 14% and 6% this year, respectively. Wall Street is more bullish on Microsoft as it ramps up its generative artificial intelligence capabilities after it said it would incorporate ChatGPT technology into its products like Bing and Edge. Uber Technologies, Snowflake, and Salesforce are some other growth stocks that made this list.
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