The Tortoise and the Hare: 3 Growth Stocks for Slow and Steady Wins

Stocks to buy

Growth stocks are those that grow faster than average as measured at the top line or by revenue. If we measure growth across the S&P 500, it stands somewhere around 4% on average.

That means there are a lot of growth stocks overall. However, the term growth stock generally means shares of companies that grow much faster.

The past few years have shown how risky investing in growth stocks can be. Much of their growth is fueled by debt used to seek further growth but rising interest rates increased the cost to finance it. Furthermore, debt availability fell. The result was that once high-flying growth stocks suddenly became much less attractive.

With rate cuts anticipated at some point in 2024, growth stocks are again becoming attractive. These three in particular are relatively safe.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) should arguably be the first choice for investors seeking growth stocks to safely grow their futures.

It offers incredible opportunity relative to its size, safety that includes a modest dividend and a position that no other firm has.

Microsoft’s top line grew by 17% during the most recent quarter, a rate almost any firm would be happy with. The difference with Microsoft is that it does so at scale. There are very few other companies that bring in $60 billion in quarterly revenues growing so quickly.

Cloud revenue accounted for $35.1 billion of the total during the period. That was 23% higher than the year-ago quarter. Microsoft continues to forecast strong growth from its AI investment in CoPilot. Yet industry experts believe the opportunity will take quite some time to materialize, perhaps six years or more.

Regardless, Microsoft is incredibly powerful at the moment and is thriving overall. It is also a very safe approach to growth stock investment and offers a modest dividend as well.

Intuitive Surgical (ISRG)

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Intuitive Surgical (NASDAQ:ISRG) is an excellent stock overall and one that investors everywhere should consider. 

The company exhibits safety in multiple ways. It is one of the better-known healthcare stocks, a sector known to be relatively stable given that healthcare spending tends to remain constant throughout economic cycles. 

But the maker of the DaVinci Surgical system also provides growth. Revenues were up 11% during the first quarter. The company is particularly well-positioned for investment, especially for those seeking growth and stability out of the healthcare sector. 

The company should realistically be able to continue its upward trajectory as the American population ages. Demand for procedures should continue to rise. However, expansion for Intuitive Surgical is not limited to the domestic market. The company saw procedure volume grow by 16% worldwide during the quarter. 

Intuitive Surgical also managed to increase earnings by an impressive 51% during the period. 

Alphabet (GOOG)

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One of the best reasons to invest in Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock is a recent resurgence that is attributable to strategy, visible in the most recent earnings report. The company is again firing on all cylinders, particularly concerning search revenues and cloud growth.

That’s the point: Alphabet’s Google division consciously redoubled its efforts to focus on search and AI. The company has redirected resources from ‘moonshot’ projects to those with more immediate, tangible returns. That refocus on core products is ongoing across tech with firms like Apple shuttering projects such as the Apple car.

Some pessimists may assert that Google’s hand was forced given the success of Microsoft, especially with AI. Whatever the catalyst, the refocus is a good idea overall and one that is providing tangible results. In my mind, it again makes Alphabet a very strong growth stock with which to build your portfolio and future.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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