Growth stocks are stocks of companies that are expected to grow at an above-average rate relative to the overall market. These companies typically have strong earnings and revenue growth and may be in high-growth industries such as technology or healthcare.
Investors typically buy growth stocks because they believe that the companies will continue to grow and will generate strong returns in the future. Growth stocks are often considered to be riskier than other types of stocks because they are more dependent on the continued success of the companies they represent.
Growth stocks can be contrasted with value stocks, which are stocks of companies that are considered to be undervalued by the market. Value investors look for stocks that are trading at a discount to their intrinsic value, and believe that these stocks will eventually recover and generate strong returns.
Overall, growth stocks are stocks of companies that are expected to grow at an above-average rate and are often considered to be riskier than other types of stocks. Growth stocks can provide the potential for strong returns, but also carry higher levels of risk.