Discovering outperforming growth stocks today can be challenging. High-profile mega-caps like Nvidia (NASDAQ:NVDA) are often seen as overvalued but continue to rise, driven by a fear of missing out among investors eager to share in the tech sector’s gains. Likewise, those retail investors interested in smaller-cap opportunities feel as though they’re missing out by not buying the booming mega-caps — but there is a risk that this trend may abruptly end, potentially leaving millions of bagholders awaiting reversal.
There are still outperforming growth stocks out there. They just require more effort to uncover. Among these, two stocks show remarkable resilience and promise substantial growth potential. A third, a consistent overachiever, continues to surpass expectations despite broader economic challenges. These bargain stocks offer a strategic opportunity to diversify from overpriced mega-caps and tap into emerging trends that could soon draw significant attention on Wall Street.
AST SpaceMobile (ASTS)
Can you name this month’s top outperforming growth stocks without first looking at AST SpaceMobile (NASDAQ:ASTS)? After a bumpy few months (or years), investors faced strategic funding excitement before dilutive offerings dashed those dreams. Likewise, near-constant teasing that fully commercial space-based cellular connections were around the corner left many frustrated. Many investors sold at a loss to limit the constant uncertainty and volatility. But that may have been a mistake.
Shares surged 300% over the past month on the heels of two key partnership agreements. Readers may remember me talking about the clear tie-in between AST SpaceMobile and AT&T (NYSE:T) but this month the longstanding working relationship was fully cemented. The two companies, formerly operating under a memorandum of understanding rather than a more impactful operating agreement or commercial contract, signed a definitive agreement that sees AST SpaceMobile servicing AT&T’s customers from space through 2030. This points to imminent commercialization, further reinforced by the immediate Verizon (NYSE:VZ) announcement alerting investors that AST and the other telecom giant signed a similar agreement for $100 million.
At around $9 per share today, there’s a little too much enthusiasm surrounding AST SpaceMobile for me to say this stock is worth buying yet, considering it remains pre-revenue. The best buying opportunity was around $4 for long-term gains but I’d expect momentum to cool over the next month with the $6 range being a new lower limit for the outperforming growth stock.
GigaCloud Technology (GCT)
GigaCloud Technology (NASDAQ:GCT) may be near the beginning of a substantial reversal, as shares have risen 50% since January but remain undervalued by most estimates. Currently trading at just 12x earnings, its share price stayed fairly flat the past month, perhaps indicating a consolidation period before the next leg upward.
In its first-quarter earnings, GigaCloud reported nearly a 100% year-over-year increase in sales and a 71% expansion in net income. A B2B product sourcing company, management anticipates more growth while acknowledging that recent capital expenditures impacted its bottom line. Still, executives emphasize that these investments will enhance their ability to meet the increasing demands of marketplace buyers and sellers and improve operational efficiency.
GigaCloud has also launched a significant initiative within the furniture seller markets, introducing a branding-as-a-service campaign. This allows business owners to white-label existing furniture manufacturing efforts to establish their own sales channels and penetrate the broader furniture market. Such strategies demonstrate GigaCloud’s skill in recognizing and capitalizing on new market opportunities, which is promising for the outperforming growth stock’s future potential.
Sharkninja (SN)
Calling an apparent run-of-the-mill consumer discretionary stock and appliance manufacturer an outperforming growth stock may seem counterintuitive — until you zoom out on the stock’s trading chart and look at more than a decade of strong performance. Sharkninja (NYSE:SN) consistently defies economic expectations, demonstrating a robust 20% compounded annual growth rate in sales since 2008, even amid the various market downturns between then and today.
Since its public listing last summer, Sharkninja’s shares have already yielded a 77% return to early investors — tripling the performance of the S&P 500 over the same timeframe –with no signs of momentum waning. The company’s latest quarterly report revealed a 25% surge in sales, an impressive feat especially when compared to significant sales declines experienced by blue-chip retailers like Target (NYSE:TGT). With its strong market presence and diverse product range, Sharkninja might be the most under-the-radar, outperforming growth stock in today’s market.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.