Growth investing in NASDAQ: Finding the next big winners from India
The NASDAQ Composite crossed 20,000 for the first time in December 2024. It delivered a 29.6% return that year. Individual growth stocks performed even better. AppLovin surged 713%. Palantir gained 340%. NVIDIA added $2.2 trillion in market cap alone.
Indian investors now access these opportunities through platforms that accept investments starting at just $1. The RBI's Liberalised Remittance Scheme permits up to $250,000 annually for overseas investments. This opens the door to growth investing in NASDAQ from India, which was difficult even five years ago.
But finding the next Apple or NVIDIA requires more than enthusiasm. It requires a disciplined framework for identifying high-growth stocks, analysing revenue trajectories, and managing the risks associated with concentrated growth portfolios.
How to identify growth stocks on NASDAQ
Growth stock investing on NASDAQ starts with quantitative screening. Professional investors filter for three primary characteristics: revenue growth exceeding 25% year-over-year, relative strength ratings above 90, and institutional ownership above 30%.
These filters separate companies with genuine momentum from those riding temporary hype. The top five NASDAQ-100 performers in 2024 shared common traits. AppLovin (+713%) launched its Axon 2 AI advertising platform. Palantir (+340%) accelerated its AI-driven government contracts. NVIDIA (+180%) dominatedthe AI chip infrastructure market. Each company solved a significant, expanding problem in a way competitors could not replicate quickly.
Revenue acceleration matters more than absolute growth. When a company's revenue growth rate increases quarter over quarter, its stock tends to outperform. Palantir demonstrated this pattern perfectly. Its year-over-year revenue growth accelerated from 28.79% in 2024 to 56.18% in 2025. This acceleration drove its share price to new highs. Conversely, decelerating growth often signals trouble, even when absolute numbers remain positive.
Institutional accumulation provides another signal. When hedge funds and mutual funds increase positions over consecutive quarters, it validates the growth thesis. Retail investors can track these filings through SEC 13F reports published quarterly.
Key growth metrics to track
The PEG ratio remains the most efficient single metric for growth stock valuation. It divides the price-to-earnings ratio by the earnings growth rate. A PEG below 1.0 suggests undervaluation relative to growth. Values between 1.0 and 1.5 indicate fair pricing for quality companies. Peter Lynch popularised this metric, and it still works.
Price-to-sales (P/S) becomes essential for unprofitable growth companies. Current market ranges help set expectations. Mature tech trades at 3–8x sales. High-growth tech commands 8–15x. Hypergrowth SaaS companies trade at 15–30x. Amazon's P/S of 3.8x represents the lowest among the Magnificent Seven, while NVIDIA commands approximately 29x.
For SaaS companies, three revenue growth metrics prove critical:
- Rule of 40: Revenue growth percentage plus EBITDA margin percentage should exceed 40. Palantir recently scored 114 on this metric. The 2024 industry median sits at just 34, meaning most SaaS companies fail this test.
- Net revenue retention (NRR): This measures growth from existing customers. Top performers achieve 120% or higher. CrowdStrike reports 128%. Anything below 100% means customers shrink their spending over time.
- LTV/CAC ratio: The lifetime value divided by customer acquisition cost should fall between 3:1 and 5:1. A ratio below 3:1 suggests acquisition costs are unsustainable. A ratio above 5:1 may indicate underinvestment in growth.
Gross margin benchmarks vary by business model. SaaS companies target 75–80%; anything above 80% is considered excellent. Hardware companies achieve 30–50%. Semiconductor companies range between 40–60%.
Revenue growth analysis that separates winners from losers
Year-over-year comparisons eliminate seasonality and reveal genuine trends. Quarter-over-quarter data shows momentum. Healthy sequential growth varies by company stage. Early-stage companies ($1–5M annual recurring revenue) should target 15–20% quarterly growth. Scaled companies above $20M sustain 5–10% quarterly.
Earnings calls reveal more than financial statements. Companies exhibiting "beat-and-raise" patterns — exceeding estimates AND raising forward guidance — consistently outperform. Palantir's Q4 2025 results demonstrated this: $1.41 billion in revenue against $1.33 billion expected, paired with raised guidance.
If you're new to investing in the US market, start with our complete guide to investing in NASDAQ from India to set up your account and begin trading.
Management commentary deserves close attention—words like "accelerating" and "expanding TAM" signal confidence. Phrases like "headwinds," "normalising," or "prudent" often precede growth slowdowns. Segment breakdowns reveal which business units drive results. AWS accounts for roughly 50% of Amazon's operating income but only 15–18% of total sales. This disparity shows how high-margin segments transform company economics.
Market opportunity sizing: how big can a company actually get?
NVIDIA's TAM expansion offers a masterclass in market sizing. CEO Jensen Huang projects the data centre TAM will reach $1 trillion by 2028, up from the current $250 billion annual installed base. The company's trailing 12-month data centre revenue of $115 billion against this trillion-dollar opportunity demonstrates significant runway remaining.
Tesla illustrates multi-vertical expansion. Beyond the $500 billion global EV market, it now targets mobility-as-a-service ($120 billion by 2030), energy storage (Megapack grew over 100% year-over-year with 25% gross margins), and the Optimus robot programme.
Identifying high-growth stocks requires distinguishing genuine TAM from exaggerated claims. Watch for these warning signs: top-down-only projections without bottom-up validation, stacking multiple markets that count the same customers twice, and ignoring competitive dynamics. The TAM/SAM/SOM framework helps ground projections. The total addressable market represents the theoretical maximum. Serviceable addressable market narrows to realistic segments (typically 10–50% of TAM). The serviceable obtainable market represents near-term capture (normally 1–10% of SAM).
Valuation considerations for growth stock investing
Traditional DCF analysis struggles with growth companies. Negative free cash flow, limited historical data, and extreme sensitivity to terminal value assumptions make it speculative. Often, 75% or more of the DCF value derives from terminal-period estimates.
Growth stock valuation works better through a multiples-based comparison. EV/revenue multiples by sector provide useful benchmarks: public SaaS median trades at 5.1–7.5x (down from 18.9x at the 2021 peak), cybersecurity commands 15–21x, and AI pure-plays demand 15–30x.
When do high valuations prove justified? Amazon peaked at 18x price-to-sales during the dot-com bubble before crashing by over 90%. Yet investors who held through that crash turned $10,000 into approximately $16.5 million. What is the difference between Amazon and failed peers like Pets.com? Continued revenue growth through the downturn and an eventual path to profitability.
Factors that justify premium valuations include demonstrated earnings power, network effects creating switching costs, asset-light models with high returns on invested capital, Rule of 40 compliance, and NRR exceeding 120%.
Finding the following big winners: lessons from historical mega-caps
Apple's trajectory provides the clearest template for a multi-bagger. At the October 2001 iPod launch, shares traded at approximately $0.34 (split-adjusted) with a $5 billion market cap. Today, Apple sits at $255 per share with a $4 trillion market cap. A $1,000 investment at the iPod launch grew to approximately $450,000.
Early signals included Steve Jobs' 1997 return, the iMac G3's design innovation, and the iPod's demonstration that Apple could expand beyond computers. Each product cycle reinforced the growth thesis.
Before picking individual stocks, explore the best ways to get NASDAQ exposure from India through direct and indirect investment routes.
NVIDIA, before the AI boom, traded at $5–6 per share (split-adjusted) at the end of 2019. ChatGPT's November 2022 launch catalysed the AI narrative. Data centre revenue grew 427% year-over-year in a single quarter. The stock crossed the $ 1 trillion market cap by May 2023.
Research on 464 ten-baggers from 2009–2024 revealed free cash flow yield as the strongest predictor of multi-bagger returns — not fast EPS growth, contrary to popular belief. Small- to mid-cap starting points ($1–10 billion market cap) offer more runway for 10x returns. The average holding period for true multi-baggers exceeds 10 years, requiring patience through median drawdowns of more than 50%.
Current potential multi-baggers cluster in AI infrastructure (Taiwan Semiconductor with 70% global foundry share, Broadcom with projected $20 billion+ AI revenues in 2025), cybersecurity (CrowdStrike at $4.66 billion ARR growing 20%+ year-over-year), and emerging AI plays (Innodata up 522% in trailing 12 months, SoundHound AI tracking to double revenue in 2025).
Portfolio concentration risks every growth investor must manage
The 2024 market clearly showed the double-edged nature of concentration. The Magnificent Seven returned 67.3%. The NASDAQ-100 Equal Weight index returned just 7.3%. Thirty-four NASDAQ-100 stocks actually lost value during this exceptional year. Technology now accounts for 41% of the S&P 500, matching levels from the dot-com bubble.
Individual stocks exhibit volatility three times that of diversified indices. The dot-com crash saw NASDAQ fall 78% from its peak. Many individual stocks lost over 95% permanently. QQQ's maximum historical drawdown reached nearly 83%.
Professional fund managers use strict position sizing. High-risk growth stocks occupy 1–5% of a portfolio. Large-cap growth holdings range between 5–10%. Maximum conviction positions cap at 10–15%. Investor Glenn Greenberg advises a minimum 5% position per holding — if conviction does not warrant 5%, the investment does not warrant making.
Diversification across sectors, market caps, geographies, and investment styles (blending growth with value through a GARP approach) reduces portfolio-level risk while maintaining upside exposure. ETFs like QQQ (0.20% expense ratio, 19.60% ten-year annualised return) provide broad NASDAQ growth exposure without single-stock concentration risk.
Growth investing in NASDAQ from India rewards disciplined investors who combine quantitative screening with qualitative judgment. The tools, metrics, and frameworks above help identify companies with genuine multi-bagger potential. But position sizing, diversification, and a realistic 10+ year holding period matter just as much as stock selection. Start with proven metrics, size positions conservatively, and let compounding do the heavy lifting.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
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The NASDAQ Composite crossed 20,000 for the first time in December 2024. It delivered a 29.6% return that year. Individual growth stocks performed even better. AppLovin surged 713%. Palantir gained 340%. NVIDIA added $2.2 trillion in market cap alone.
Indian investors now access these opportunities through platforms that accept investments starting at just $1. The RBI's Liberalised Remittance Scheme permits up to $250,000 annually for overseas investments. This opens the door to growth investing in NASDAQ from India, which was difficult even five years ago.
But finding the next Apple or NVIDIA requires more than enthusiasm. It requires a disciplined framework for identifying high-growth stocks, analysing revenue trajectories, and managing the risks associated with concentrated growth portfolios.
How to identify growth stocks on NASDAQ
Growth stock investing on NASDAQ starts with quantitative screening. Professional investors filter for three primary characteristics: revenue growth exceeding 25% year-over-year, relative strength ratings above 90, and institutional ownership above 30%.
These filters separate companies with genuine momentum from those riding temporary hype. The top five NASDAQ-100 performers in 2024 shared common traits. AppLovin (+713%) launched its Axon 2 AI advertising platform. Palantir (+340%) accelerated its AI-driven government contracts. NVIDIA (+180%) dominatedthe AI chip infrastructure market. Each company solved a significant, expanding problem in a way competitors could not replicate quickly.
Revenue acceleration matters more than absolute growth. When a company's revenue growth rate increases quarter over quarter, its stock tends to outperform. Palantir demonstrated this pattern perfectly. Its year-over-year revenue growth accelerated from 28.79% in 2024 to 56.18% in 2025. This acceleration drove its share price to new highs. Conversely, decelerating growth often signals trouble, even when absolute numbers remain positive.
Institutional accumulation provides another signal. When hedge funds and mutual funds increase positions over consecutive quarters, it validates the growth thesis. Retail investors can track these filings through SEC 13F reports published quarterly.
Key growth metrics to track
The PEG ratio remains the most efficient single metric for growth stock valuation. It divides the price-to-earnings ratio by the earnings growth rate. A PEG below 1.0 suggests undervaluation relative to growth. Values between 1.0 and 1.5 indicate fair pricing for quality companies. Peter Lynch popularised this metric, and it still works.
Price-to-sales (P/S) becomes essential for unprofitable growth companies. Current market ranges help set expectations. Mature tech trades at 3–8x sales. High-growth tech commands 8–15x. Hypergrowth SaaS companies trade at 15–30x. Amazon's P/S of 3.8x represents the lowest among the Magnificent Seven, while NVIDIA commands approximately 29x.
For SaaS companies, three revenue growth metrics prove critical:
- Rule of 40: Revenue growth percentage plus EBITDA margin percentage should exceed 40. Palantir recently scored 114 on this metric. The 2024 industry median sits at just 34, meaning most SaaS companies fail this test.
- Net revenue retention (NRR): This measures growth from existing customers. Top performers achieve 120% or higher. CrowdStrike reports 128%. Anything below 100% means customers shrink their spending over time.
- LTV/CAC ratio: The lifetime value divided by customer acquisition cost should fall between 3:1 and 5:1. A ratio below 3:1 suggests acquisition costs are unsustainable. A ratio above 5:1 may indicate underinvestment in growth.
Gross margin benchmarks vary by business model. SaaS companies target 75–80%; anything above 80% is considered excellent. Hardware companies achieve 30–50%. Semiconductor companies range between 40–60%.
Revenue growth analysis that separates winners from losers
Year-over-year comparisons eliminate seasonality and reveal genuine trends. Quarter-over-quarter data shows momentum. Healthy sequential growth varies by company stage. Early-stage companies ($1–5M annual recurring revenue) should target 15–20% quarterly growth. Scaled companies above $20M sustain 5–10% quarterly.
Earnings calls reveal more than financial statements. Companies exhibiting "beat-and-raise" patterns — exceeding estimates AND raising forward guidance — consistently outperform. Palantir's Q4 2025 results demonstrated this: $1.41 billion in revenue against $1.33 billion expected, paired with raised guidance.
If you're new to investing in the US market, start with our complete guide to investing in NASDAQ from India to set up your account and begin trading.
Management commentary deserves close attention—words like "accelerating" and "expanding TAM" signal confidence. Phrases like "headwinds," "normalising," or "prudent" often precede growth slowdowns. Segment breakdowns reveal which business units drive results. AWS accounts for roughly 50% of Amazon's operating income but only 15–18% of total sales. This disparity shows how high-margin segments transform company economics.
Market opportunity sizing: how big can a company actually get?
NVIDIA's TAM expansion offers a masterclass in market sizing. CEO Jensen Huang projects the data centre TAM will reach $1 trillion by 2028, up from the current $250 billion annual installed base. The company's trailing 12-month data centre revenue of $115 billion against this trillion-dollar opportunity demonstrates significant runway remaining.
Tesla illustrates multi-vertical expansion. Beyond the $500 billion global EV market, it now targets mobility-as-a-service ($120 billion by 2030), energy storage (Megapack grew over 100% year-over-year with 25% gross margins), and the Optimus robot programme.
Identifying high-growth stocks requires distinguishing genuine TAM from exaggerated claims. Watch for these warning signs: top-down-only projections without bottom-up validation, stacking multiple markets that count the same customers twice, and ignoring competitive dynamics. The TAM/SAM/SOM framework helps ground projections. The total addressable market represents the theoretical maximum. Serviceable addressable market narrows to realistic segments (typically 10–50% of TAM). The serviceable obtainable market represents near-term capture (normally 1–10% of SAM).
Valuation considerations for growth stock investing
Traditional DCF analysis struggles with growth companies. Negative free cash flow, limited historical data, and extreme sensitivity to terminal value assumptions make it speculative. Often, 75% or more of the DCF value derives from terminal-period estimates.
Growth stock valuation works better through a multiples-based comparison. EV/revenue multiples by sector provide useful benchmarks: public SaaS median trades at 5.1–7.5x (down from 18.9x at the 2021 peak), cybersecurity commands 15–21x, and AI pure-plays demand 15–30x.
When do high valuations prove justified? Amazon peaked at 18x price-to-sales during the dot-com bubble before crashing by over 90%. Yet investors who held through that crash turned $10,000 into approximately $16.5 million. What is the difference between Amazon and failed peers like Pets.com? Continued revenue growth through the downturn and an eventual path to profitability.
Factors that justify premium valuations include demonstrated earnings power, network effects creating switching costs, asset-light models with high returns on invested capital, Rule of 40 compliance, and NRR exceeding 120%.
Finding the following big winners: lessons from historical mega-caps
Apple's trajectory provides the clearest template for a multi-bagger. At the October 2001 iPod launch, shares traded at approximately $0.34 (split-adjusted) with a $5 billion market cap. Today, Apple sits at $255 per share with a $4 trillion market cap. A $1,000 investment at the iPod launch grew to approximately $450,000.
Early signals included Steve Jobs' 1997 return, the iMac G3's design innovation, and the iPod's demonstration that Apple could expand beyond computers. Each product cycle reinforced the growth thesis.
Before picking individual stocks, explore the best ways to get NASDAQ exposure from India through direct and indirect investment routes.
NVIDIA, before the AI boom, traded at $5–6 per share (split-adjusted) at the end of 2019. ChatGPT's November 2022 launch catalysed the AI narrative. Data centre revenue grew 427% year-over-year in a single quarter. The stock crossed the $ 1 trillion market cap by May 2023.
Research on 464 ten-baggers from 2009–2024 revealed free cash flow yield as the strongest predictor of multi-bagger returns — not fast EPS growth, contrary to popular belief. Small- to mid-cap starting points ($1–10 billion market cap) offer more runway for 10x returns. The average holding period for true multi-baggers exceeds 10 years, requiring patience through median drawdowns of more than 50%.
Current potential multi-baggers cluster in AI infrastructure (Taiwan Semiconductor with 70% global foundry share, Broadcom with projected $20 billion+ AI revenues in 2025), cybersecurity (CrowdStrike at $4.66 billion ARR growing 20%+ year-over-year), and emerging AI plays (Innodata up 522% in trailing 12 months, SoundHound AI tracking to double revenue in 2025).
Portfolio concentration risks every growth investor must manage
The 2024 market clearly showed the double-edged nature of concentration. The Magnificent Seven returned 67.3%. The NASDAQ-100 Equal Weight index returned just 7.3%. Thirty-four NASDAQ-100 stocks actually lost value during this exceptional year. Technology now accounts for 41% of the S&P 500, matching levels from the dot-com bubble.
Individual stocks exhibit volatility three times that of diversified indices. The dot-com crash saw NASDAQ fall 78% from its peak. Many individual stocks lost over 95% permanently. QQQ's maximum historical drawdown reached nearly 83%.
Professional fund managers use strict position sizing. High-risk growth stocks occupy 1–5% of a portfolio. Large-cap growth holdings range between 5–10%. Maximum conviction positions cap at 10–15%. Investor Glenn Greenberg advises a minimum 5% position per holding — if conviction does not warrant 5%, the investment does not warrant making.
Diversification across sectors, market caps, geographies, and investment styles (blending growth with value through a GARP approach) reduces portfolio-level risk while maintaining upside exposure. ETFs like QQQ (0.20% expense ratio, 19.60% ten-year annualised return) provide broad NASDAQ growth exposure without single-stock concentration risk.
Growth investing in NASDAQ from India rewards disciplined investors who combine quantitative screening with qualitative judgment. The tools, metrics, and frameworks above help identify companies with genuine multi-bagger potential. But position sizing, diversification, and a realistic 10+ year holding period matter just as much as stock selection. Start with proven metrics, size positions conservatively, and let compounding do the heavy lifting.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
Ready to earn on every trade?
Invest in 11,000+ US stocks & ETFs
