Growth stocks have been on a wild ride.
For some investors, the pullbacks can feel scary.
But opportunistic investors see them as an invitation.
In the latest episode of Ticker Take, I spoke with Chris Stuchberry, Portfolio Manager at Wellington-Altus Private Wealth. He’s a growth investor who has built his approach around the moments when a quality company gets cheaper. The dip, in his view, is often the setup for the next leg higher.
His philosophy starts with portfolio fit. Growth stocks aren’t for everyone. They’re for investors who can stomach volatility and have time on their side, so a younger investor will tend to hold more growth than someone closer to retirement. The reason to bother is alpha. In periods of big change, the growth names are where the outsized returns tend to get made.
The harder question is knowing which stocks are worth buying on pullbacks. Chris sorts growth companies into three buckets. The first is cash-burning growth, where the business is growing fast but spending more than it brings in. The second is self-funding growth, where the company is breaking even or cash flow positive and growth is still accelerating. The third is profitable growth, where the company is making money, the cash pile is building every quarter, and earnings are accelerating on top of that.
With that framework in mind, here are the 5 stocks he highlighted.
Palantir (PLTR)
One of the most talked-about names in AI software, and a stock that has come up on Ticker Take before. Chris puts Palantir in his third bucket: profitable, growing at a fast clip, and accelerating on both metrics every quarter for several quarters in a row. That earns it a Rule of 40 score (a combination of revenue growth and profitability) that Chris says is in a league of its own. The stock has pulled back even as the fundamentals have improved. The market is still pricing Palantir for perfection. But as long as the growth keeps accelerating, Chris doesn’t see the multiple coming down.
CrowdStrike (CRWD)
Chris sees CrowdStrike as a massive leader in cybersecurity with growth that is still accelerating. It sits in his second bucket: cash flow positive, fundamentals strong, and a company that powered through its high-profile outage from a few years ago without lasting damage. He sees cybersecurity as a sector to own for the long term, and the recent pullback gave him the entry point he was looking for.
Robinhood (HOOD)
Few public companies have had a more dramatic short history. A blockbuster IPO. The GameStop saga. A sharp pullback. Then profitability in recent years. Chris now sees Robinhood in his third bucket, with accelerating growth and a real path to becoming the super app for stock trading and financial services for younger investors. The volatility has been brutal, but he sees the pullbacks as the chance to add.
ServiceNow (NOW)
Chris brings up an old market saying: price dictates sentiment. ServiceNow sits at the center of investor uncertainty around enterprise software in an AI world, and the stock has been beaten up on that narrative. The fundamentals haven’t followed. Revenue growth is still strong, margins are healthy, and the Rule of 40 score still looks great. That disconnect, a price moving on a story while the business keeps performing, is exactly the setup Chris wants.
SoFi Technologies (SOFI)
SoFi has worked through Chris’s three phases and is now profitable. He sees it as a digital-native bank moving into a space where legacy players have under-invested in technology for years. A recent capital raise built up the balance sheet and gave SoFi room for acquisitions. Growth is healthy. Margins are healthy. The stock got caught in the broader software selloff, but Chris points out that SoFi is actually a bank, and the long-term opportunity from here looks good.
The Ticker Take
When a growth stock drops 30 per cent, most investors run. Chris reaches for his framework and asks: did anything actually change? If the answer is no, he sees growth stocks like these as the ideal candidates for outperforming the market.
Jon Erlichman is a BNN Bloomberg contributor and the host of Ticker Take on YouTube.
