The stock market provides ample ways to grow wealth. Dividends and value investing are common methods. But growth stocks can accelerate your journey to financial riches.
Over the long term, earnings growth is the primary driver of stock market returns. And, the same principle applies to individual stocks. As growth companies compound revenues, they grow EPS at a higher rate as they achieve scale and show higher operating leverage.
As a result, the stock price follows EPS higher. But, where do you find these growth stocks with excellent earnings growth potential? The best areas for growth are new industries or technologies where companies have a long growth runway. The secular growth in cybersecurity, cosmetics and the cloud backs their bullish thesis.
Today, they offer substantial gains as they grow in their respective industries. Palo Alto Networks (PANW) One of the best ways to capitalize on the cybersecurity theme and get rich is by buying Palo Alto Networks (NASDAQ: PANW ). The company remains one of the best growth stocks in the technology sector.
Cyberthreats are becoming more intense, as the recent Change Healthcare cyber attack proved. With hackers leveraging artificial intelligence ( AI ) and some state actors involved for geopolitical reasons, the threat environment will remain elevated. Thus, the heightened threat plus regulatory requirements like the Securities and Exchange Commission ( SEC ) disclosure rules make cyber investments a priority for companies.
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