The “Rule of 10” for deciphering the next stock market champions is a concept introduced by Goldman Sachs Group, Inc. (GS) that aims to identify businesses with the potential to consistently increase their revenues by at least 10%. This rule, developed by Goldman Sachs, has identified 21 S&P 500 firms in early 2025 that meet this criterion. These companies are considered to be the next wave of equities ready to soar in value.
Annunci
The Rule of 10 was created to uncover the next generation of growth stocks by focusing on companies that have a track record of strong revenue growth and the ability to sustain this growth in the future. By analyzing successful companies like Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN), and Apple Inc. (AAPL), Goldman Sachs aims to identify the key factors that contribute to their success and apply this knowledge to identify potential future winners in the stock market.
To pass the Rule of 10 criteria, companies must meet the following requirements:
1. List on the S&P 500 Index.
2. Show at least a 10% increase in revenue in each of the last two years.
3. Be projected to increase revenues by at least 10% in the current year, the next fiscal year, and the fiscal year following that.
By screening the S&P 500 for companies that meet these criteria, Goldman Sachs is able to identify stocks with the potential to outperform the market in the future. This screening process helps investors identify investment opportunities that have a high likelihood of providing strong returns in the long term.
Some of the stocks that have been identified as meeting the Rule of 10 criteria include popular companies like Alphabet, Amazon, Synopsys Inc. (SNPS), Visa Inc. (V), and Intuitive Surgical (ISRG). These companies have demonstrated strong revenue growth in recent years and are expected to continue this trend in the future.
Investors can use screening tools to identify companies that meet the Rule of 10 criteria and have the potential to outperform the market. By entering the specified criteria into a screening tool, investors can identify stocks that Goldman Sachs believes have a high probability of providing strong returns in the future.
It is important to note that the Rule of 10 is not a definitive list of stocks to invest in, but rather a starting point for identifying potential investment opportunities. Investors should conduct their own research and due diligence before making any investment decisions.
In conclusion, the Rule of 10 introduced by Goldman Sachs provides investors with a valuable tool for identifying growth stocks with the potential to outperform the market. By focusing on companies that have a history of strong revenue growth and are expected to continue this trend, investors can identify stocks that may provide significant returns in the future. Remember to trade wisely and always conduct thorough research before making any investment decisions.