Equity investors seeking long-term growth have focused on popular technology stocks in recent years. As a result, other industries have been left behind—and today they offer attractive growth prospects and valuations for investors who can find them.
Technology has been a powerful impetus for US growth stocks. From the migration to the cloud to the artificial-intelligence (AI) revolution, the unfolding technological disruption has helped push a small group of US mega-cap stocks to dizzying heights in recent years. But as we’ve seen this January, the biggest technology stocks are vulnerable to dramatic corrections, given their size and the potential for AI disruptors like DeepSeek to shake up the market.
The good news: growth stocks can be found across diverse sectors and industries that haven’t been on investors’ radar for a while. Examples include various industries within the healthcare and consumer sectors, such as specialty retailers and medical-device companies.
Attractive Valuations and Earnings Growth Potential
Some of these industries offer very favorable growth profiles today, with attractive valuations to boot. For example, several healthcare industries trade at relatively low price/earnings valuations to their most-recent 10-year history, including healthcare equipment and supplies at the 13th percentile and healthcare providers and services at the sixth percentile (Display). Food, beverage, and tobacco and consumer services are at the first and 10th percentiles, respectively, over the same period.
