Growth is oxygen. But when it evaporates, the consequences can be severe - ask anyone who bought Cisco in the Dot-Com Bubble or newer investors who lived through the 2020 to 2022 COVID cycle.
Deciphering which businesses can sustain their high growth rates is a challenge for even the most seasoned professionals, which is why we started StockStory. That said, here are two growth stocks with significant upside potential and one whose momentum may slow.
One Growth Stock to Sell:
Semtech (SMTC)
One-Year Revenue Growth: +20.6%
A public company since the late 1960s, Semtech (NASDAQ:SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.
Why Do We Steer Clear of SMTC?
- Persistent operating margin losses and eroding margin over the last five years point to its preference for growth over profits
- Investment activity picked up over the last five years, pressuring its weak free cash flow margin of 9.3%
- Push for growth has led to negative returns on capital, signaling value destruction, and its shrinking returns suggest its past profit sources are losing steam
At $80.53 per share, Semtech trades at 40.5x forward P/E. To fully understand why you should be careful with SMTC, check out our full research report (it’s free).
Two Growth Stocks to Watch:
Cloudflare (NET)
One-Year Revenue Growth: +28.1%
With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE:NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks.
Why Will NET Beat the Market?
- Billings have averaged 34.2% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Notable projected revenue growth of 27.7% for the next 12 months hints at market share gains
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
Cloudflare’s stock price of $173.37 implies a valuation ratio of 23.6x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Intuitive Surgical (ISRG)
One-Year Revenue Growth: +20.5%
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ:ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Why Does ISRG Catch Our Eye?
- Average unit sales growth of 12.2% over the past two years reflects steady demand for its products
- Projected revenue growth of 13.9% for the next 12 months suggests its momentum from the last two years will persist
- Earnings per share have massively outperformed its peers over the last five years, increasing by 21.6% annually
Intuitive Surgical is trading at $523.10 per share, or 52.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.