Growth stocks can be a good way to build wealth. These are some of the best growth stocks for May 2025

Growth stocks are companies that investors expect to outperform industry peers or the broader market in earnings, revenue, and share price increases. Unlike more established firms, which may return these profits to shareholders in the form of dividends or use them to buy back stock, growth stocks tend to reinvest these gains in expansion, research, development, and similar areas. However, although growth stocks may generate sizable returns for investors, they also carry a higher degree of risk as a result of market volatility. Growth is one key factor investors consider, along with others such as value and momentum.

Below, we explore the best growth stocks to watch this month and offer a detailed explanation of our methodology for compiling this list. All data are current as of April 30, 2025.

Best Growth Stocks to Watch in May 2025
Ticker	Company	Sector	Market Cap ($B)	Price ($)	30-Day Return (%)
CEP	Cantor Equity Partners, Inc.	Finance	0.54	42.13	295.82
EPWK	EPWK Holdings Ltd.	Technology Services	0.42	19.00	291.75
RGC	Regencell Bioscience Holdings Limited	Health Technology	0.78	60.00	142.91
NUTX	Nutex Health Inc.	Health Services	0.61	109.97	120.38
ZYBT	Zhengye Biotechnology Holding Limited	Health Technology	0.43	9.11	78.28
HTZ	Hertz Global Holdings, Inc	Finance	2.1	6.82	67.16
PLTR	Palantir Technologies Inc.	Technology Services	279.41	118.44	48.05
SEZL	Sezzle Inc.	Technology Services	1.76	51.95	47.63
KROS	Keros Therapeutics, Inc.	Health Technology	0.59	14.44	46.60
ZBIO	Zenas BioPharma, Inc.	Health Technology	0.48	11.58	46.03
RUA	Russell 3000	N/A	N/A	3,163.89	0.37

Growth Stocks in the Current Market Environment

In general, growth stocks tend to perform better in periods of economic expansion when the cost of borrowing is low. Though inflation is lower than it has been in recent years, higher interest rates and slowing economic growth mean that the current environment may not be ideal for these firms.

That said, not all growth stocks benefit from the same market conditions. For example, companies that enjoy a particular competitive edge within their industries or a dominant position in the market may be more likely to grow regardless of the macroeconomic environment. Similarly, firms in a hot industry that is experiencing significant growth may also outperform independently of other factors. A recent example has been technology stocks focused on AI, although an industry sell-off following the unveiling of a competitive AI platform by Chinese firm DeepSeek in January 2025 is a reminder that these conditions may change suddenly.

Health technology and biotech firms are often present in lists of top growth stocks thanks to their potential for massive breakouts following strong data about a new product or launches of a blockbuster drug or piece of equipment. Despite turbulence due to inflation and a slowdown in product launches, this sector may still be poised for significant growth due to an aging population and increased health care spending, with national health expenditures climbing to $4.9 trillion in 2023.

How We Chose the Best Growth Stocks

In our growth stocks screen, we focused on companies listed on either the Nasdaq or the New York Stock Exchange. To ensure that the firms we screened are well-established, we excluded stocks trading under $5 per share, those with a market capitalization under $300 million, and any with a daily trading volume under 100,000. Additionally, companies with growth in excess of 1,000% were excluded as outliers.

From this list, we selected the stocks with the highest 30-day returns to complete our ranking. In many cases, companies with a strong recent history of outperformance relative to industry peers or the broader market have built momentum thanks to positive company or external news, favorable market sentiment, or appealing technicals. If these conditions remain the same, these companies may experience continued growth in the future, though past performance is not an indicator of future returns.

How to Invest Wisely in Growth Stocks

Besides 30-day return, there are many key financial ratios that are helpful to use to identify potential growth stock investments. Using multiple metrics provides a fuller picture of the benefits different candidates offer, their financial positions, and how the market views them with respect to potential future gains.

Earnings Per Share (EPS) Growth

Earnings per share (EPS) growth is a measure of the percentage increase in a company’s earnings per share over a given period, typically year-over-year. Positive or accelerating EPS growth indicates underlying financial health and suggests the potential for future returns.

Price-to-Earnings (P/E) Ratio

Price-to-earnings (P/E) ratio is a comparison of a company’s stock price and its EPS. Higher P/E ratios suggest that investors are bullish about a company but may also signal that it is overvalued. On the other hand, a low P/E ratio may mean that a stock is undervalued relative to the industry or the broader market, or that investors are not especially optimistic about its prospects.

Price-to-Book (P/B) Ratio

Price-to-book (P/B) ratio is a measure of a firm’s market value against its book value, or the net value of the assets on its balance sheet. Some contrarian investors believe that a low P/B ratio indicates an undervalued stock that may have growth potential. However, P/B ratios can vary significantly from industry to industry, so it’s important to take stock of how a particular company compares with its peers.

How to Find Growth Stocks

Investors don’t have one single method for identifying promising growth stocks. Factors such as financial health, management, returns, and market position relative to industry peers are all helpful to consider.

Looking at a prospective growth stock investment, you should consider the company’s revenue, EPS, and profit margin history. Companies with a consistent record of increasing earnings may be likely to continue to grow into the future. It’s best to avoid stocks paying a dividend if you’re interested in growth potential—companies paying a dividend are opting to not reinvest profits back toward investment in company growth.

Identifying firms with a relative industry advantage over their peers depends upon the specific sector and industry. For instance, some industries—like health care—may be quite opaque to investors without special expertise. In other cases, it may be easier to identify a sustainable competitive edge in the form of a unique product, technology, or service that a company offers. An example of a competitive edge is NVIDIA Corp.’s (NVDA) data center processors, widely viewed as advantageous over rival products thanks to their system-scale integration capabilities.

A company’s management and corporate governance can also be helpful clues to its growth potential. How have the firm’s leaders navigated challenges and taken advantage of opportunities in the past? Looking to historical earnings reports can show whether a firm has been able to meet its goals, including in the area of forecasted EPS and revenue performance.

Lastly, share price performance can be an indicator of future growth potential. Look for companies that have higher stock price gains than their industry or the broader market. When making a comparison, it’s helpful to benchmark a firm’s performance against the Russell 1000 Index. As of April 30, 2025, the Russell 1000 had returned 0.48% in the last 30 days. The stocks in our screen above have all significantly outperformed this level, potentially suggesting the prospect of future growth as well. A metric like compound annual growth rate (CAGR) can also help to compare two companies more directly.

Are These the Best Growth Stocks?

It is difficult to assess which growth stocks are the “best.” In reality, growth stocks in general—and these companies in particular—may not be suitable for each type of investor. Growth stocks may exhibit a higher degree of volatility than some more established, larger peers. Because many growth stocks are companies making aggressive maneuvers to expand operations, and because these moves may or may not succeed, investing in growth stocks can carry certain risks. Further, it can be difficult to predict which stocks exhibiting growth characteristics, such as the metrics identified above, will successfully generate outsized returns.

Investors interested in growth stocks should keep in mind that recent performance history is not a guarantee of future returns.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author does not own any of the above securities.

They offer convenience but can have hidden fees and unspent funds can be forfeited

Reviewed by Charlene Rhinehart
Fact checked by Suzanne Kvilhaug

Gift cards are a popular and convenient way to give a gift for any occasion, such as birthdays, anniversaries, holidays, and graduations. With their flexibility and ease, they can make gifting a simpler process.

Despite their convenience, however, it’s important to understand how they work—especially when it comes to making purchases—how they compare with other cards, and how to avoid pitfalls that come with their use.

Key Takeaways

• There are different types of gift cards: store-specific (closed-loop), flexible-use (open-loop), and both physical and digital versions, each with their own pros and cons.
• Gift cards are easy to redeem in stores or online, but be mindful of hidden fees, expiration dates, and the risk of losing physical cards.
• Be careful of scams that come in a variety of ways; no legitimate business or entity will ask for payment via a gift card.

How Gift Cards Work

A gift card is simply a type of prepaid card with a set value that can be used to make purchases at a specific retailer.

You buy a gift card, determine the amount added to it, and present it to a recipient who can then use it as they would any other payment method. (Of course, you can buy a gift card and use it yourself.)

Most stores allow you to use their gift cards in their brick-and-mortar locations and online at their websites. While the process is straightforward and similar to that of cash or a credit/debit card, there may be restrictions on some cards.

Cards come with instructions about:

• How to redeem their value
• Whether there’s an expiration date for use
• Whether they can be used only at specific locations
• If there are activation requirements or special conditions for using them

Different types of gift cards will have their own set of rules. Knowing the types and their specific details can help you make the most of them.

Types of Gift Cards

Closed-Loop Gift Cards

Closed-loop gift cards are the most common type of gift card. They can only be used within a retailer’s specific sphere.

For example, an Amazon gift card can only be used to make purchases on Amazon. A Barnes & Noble gift card can only be used in its physical bookstores or on its website.

Closed-loop gift cards are great when you know the recipient’s interests or favorite stores.

Open-Loop Gift Cards

Open-loop gift cards are a lot more flexible than closed-loop cards. They function like regular credit or debit cards and can be used where major cards are accepted.

To use them, you first load them with a value, such as $20, $50, $100, or whatever amount you choose, and then swipe them at checkout.

They’re great for use almost anywhere, such as at gas stations, restaurants, shops, and movie theaters. However, they may come with activation fees or transaction charges, so it’s important to read the fine print.

Physical Gift Cards

Physical gift cards are cards you can hold, often with a magnetic strip like most standard cards, and made of plastic or metal.

You can use these in stores and online as you would other types of gift cards. They can be bought in physical stores or online.

Physical gift cards work well as gifts because the recipient can actually hold them and use them in physical locations.

The only downside is that they can be lost, which often means the value on the card is forfeited, as they can be difficult to replace without proof of purchase.

Digital Gift Cards

Digital gift cards come in electronic form, often in an email or on a retailer’s app. You can use them by entering the card number or PIN at the retailer’s website or by scanning the barcode on your phone in the store.

Digital gift cards are great when you’re not physically near the recipient of your gift, and are easy to gift at the last minute.

They’re also easier to keep track of as they won’t get lost, and they’re better for the environment as no actual card is created.

$23 Billion

The approximate dollar amount in unspent funds on gift cards in the United States in 2024.

How to Redeem Gift Cards

There are a few ways you can redeem gift cards, depending on their type.

• In-store purchases: If you have a physical gift card, you can present it at checkout, where you’ll swipe it like a credit/debit card, and the value of your purchase will be deducted from the balance.
• Online stores: Most gift cards you receive, whether physical or digital, can be used at online stores. You’ll generally just punch in the card number and PIN, or hit a button that deducts payment from the digital card.
• Exchange for cash: Some retailers may allow you to transfer the balance on your card to cash. This often depends on the specific retailer and various restrictions, as cash can be used anywhere, and the retailer may want you to keep spending the balance in their store. You can also sell gift cards online and receive cash, though you’ll generally receive a little less than the card value.

Pros and Cons of Gift Cards

Pros

Gift cards come with a lot of advantages for both the giver and the recipient. For the giver, they’re an easy gift option, without the need for stress or thought of selecting a gift. There are no issues with selecting a bad gift or the wrong size or color.

If you need a last-minute gift, they can be obtained quickly. And sometimes, they come with bonuses, such as buy $50 and get an extra $5 on the card. They’re easy to buy, handle, and send to the recipient.

The recipient of a gift card receives a gift and can use it to purchase something of their choosing. They can splurge on an item they’ve been wanting but were hesitant to spend on.

This tends to be more desirable than being stuck with a gift you don’t actually want and can’t return.

Cons

Despite their benefits, not all gift cards are ideal. They’re often limited to a specific retailer, so purchase options can be limited. They may also come with hidden fees, such as activation fees or transaction fees, that reduce the value of the card.

Some cards also come with expiration dates that limit when you can use them. If they expire, then you lose the financial gift. Note that federal rules have been put in place to limit card fees and expiration dates.

Lastly, if you lose a gift card, it can be difficult to replace if you don’t have proof of purchase (so be sure to keep gift card receipts). Or similarly, if the retailer goes out of business, you’re stuck with a useless card.

Pros

• Convenient and flexible

• Personalized

• Budget-friendly

• Good for last-minute gifts

Cons

• Fees

• Expiration dates

• Limited use

• Potential for loss of physical cards

Gift Cards vs. Prepaid Cards

While similar, gift cards and prepaid cards have distinct differences. Gift cards are generally single-use cards. There’s one balance on them, and when that is depleted, the card is done. They’re also usually tied to a specific retailer (closed-loop) or payment network (open-loop) and intended as a gift.

Prepaid cards, on the other hand, are intended as a budgeting and spending tool rather than a gift. They are a lot more flexible prepayment- and usage-wise. Money can be added at any time without limit, and they can be used anywhere credit or debit cards are accepted.

Beware of Scams

As with all types of monetary cards, scammers are looking to take advantage of people and steal their cards. Here are a few different scams to be aware of.

• Online auction scams: Sellers on online auction websites may be selling an item that doesn’t exist, often asking for payment via gift cards.
• Bot scams: Automated bots can scrape gift card numbers and use the funds as soon as the card is activated. They also may trick users into buying gift cards for products or services that don’t exist.
• Fake cash prize scams: Scammers will call or email saying you’ve won a gift but need to pay taxes or fees using gift cards before you can claim it.
• Fake tech support scams: Some people pose as tech support agents, convincing consumers to purchase gift cards as a way to fix tech problems, most of which don’t even exist.

Protect Yourself

As with all dealings involving money, proceed with caution. Don’t provide strangers with your important information, such as card numbers (or social security number, bank account number, etc.). Be vigilant, especially if someone unknown reaches out to you for information (rather than you reaching out for assistance).

Try to verify the source of contact and if you can’t, stop the communication. Most legitimate businesses, organizations, and government agencies will never ask for payment via a gift card.

The Bottom Line

Gift cards can be a thoughtful and hassle-free gift, offering flexibility and convenience to both the buyer and the recipient.

To get the most out of gift cards and to avoid losing their value, it’s important to know how they work and what fees or limitations may apply.

Whether you’re receiving or giving, get to know the ins and outs of your gift card so you can use it to its maximum potential and avoid common pitfalls, particularly the scams that consumers often experience.