Apple, Amazon and Nvidia might pop into your head when you think S&P 500 growth stocks. But that's not where the growth is now.
Most growth stocks are collapsing. But not all. Only nine stocks in the S&P 500 Pure Growth index are up this year. That includes less-known members like technology play Enphase Energy, Devon Energy and health care stock Eli Lilly, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
They're rare standouts given that most growth stocks are getting pounded. More than 85% of the 57 pure growth stocks in the S&P 500 are down this year. And seeing big-cap tech stocks lag hasn't happened in years.
"The largest stocks in the market are set to contribute negatively to S&P 500 performance for the first time since at least 2013," says Bespoke Investment Group. "Megacaps are costing the index almost 10% on the year compared to a contribution of -7.4% for all other stocks."
But that doesn't mean all big growth stocks are broken.
S&P 500 Growth Struggles
The struggles of growth stocks this year are profound.
The SPDR Portfolio S&P 500 Growth ETF is down more than 28% this year. That's miles worse than the 4.8% drop by the SPDR Portfolio S&P 500 Value ETF.
And much of that pain is due to collapsing prices of the growth giants. Meta Platforms is down 64% this year, while Tesla is off 55%. But even the more mature megacap growth stocks in the S&P 500 are ailing. Microsoft is down 27% and Apple is off 23%.
So where are the growth stocks that are up?
The New S&P 500 Tech Growth Stock Winners
When looking at the growth stocks pulling ahead now, they're very different than they were in 2020. Think less tech. And think smaller.
Just two S&P growth stocks up this year are in the tech sector. Heading the charge higher is the well-managed maker of solar-power equipment, Enphase Energy. The company's $45 billion market cap is tiny next to Apple's $2.3 trillion. But it's running circles around giant technology stocks. Shares of Enphase are up 72% this year, a standout when the Technology Select Sector SPDR Fund is down more than 25%.
And it's not just stock-price growth at Enphase. Analysts see the company's profit next year jumping 23% on 36% higher revenue of $3.1 billion. That's huge growth in a year many expect a recession.
The other tech growth stock that's up this year is consulting firm Gartner. But barely: It's only up 1.2%.
Winning Growth Stocks Hard To Find
The few energy stocks considered to be growth plays are thriving. Devon Energy, an Oklahoma City-based oil and natural gas explorer, is lighting it up. Unlike most growth stocks in the tank, shares of Devon are up 38.8%. And that's just one of the three growth energy stocks up this year: The others are Targa Resource and Diamondback Energy.
Outside of energy, some health care growth stocks are still looking fit. Eli Lilly, best known for its suite of treatments for diabetes like Basaglar, is up more than 36% this year. Analysts think the company's profit will rise more than 7% next year on more than 6% higher revenue of $30.4 billion.
Additionally, growth stocks associated with strong results in a recession are holding on. Shares of auto parts sellers O'Reilly Automotive and AutoZone are up 15.6% and 12.2% this year, respectively, on the idea that people will keep their jalopies running before spending money on a new ride during a recession.
It's a tough time for the usual suspects in growth stocks. But that only means you might need to widen your net to catch some winners.
S&P 500 Pure Growth Stocks Up This Year
| Company | Ticker | Year-to-date stock change | Sector |
|---|---|---|---|
| Enphase Energy | 81.9% | Information Technology | |
| Devon Energy | 39.8% | Energy | |
| Targa Resources | 36.1% | Energy | |
| Eli Lilly | 30.3% | Health Care | |
| Diamondback Energy | 27.4% | Energy | |
| Regeneron Pharmaceuticals | 18.8% | Health Care | |
| O'Reilly Automotive | 14.3% | Consumer Discretionary | |
| AutoZone | 12.5% | Consumer Discretionary | |
| Gartner | 1.9% | Information Technology |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
