A stock in a company expected to grow faster than average, typically paying little or no dividends.
A growth stock is a share in a company with above-average growth prospects, expected to expand earnings rapidly. Growth companies typically reinvest profits into business expansion rather than paying dividends, so growth stocks offer little dividend income. Examples include technology, biotech, and e-commerce companies. Growth stocks are more volatile than mature, dividend-paying stocks and are appropriate for investors with longer time horizons who can tolerate short-term price swings. Growth stocks can generate significant wealth if the company succeeds, but they also carry higher risk of failure if growth doesn't materialize. Growth stocks perform well in bull markets and economic expansion; they tend to underperform in recessions and bear markets.