Picking growth stocks with the highest upside potential isn’t easy. Want to know how Wall Street’s top minds spot tomorrow’s biggest winners? Goldman Sachs Group, Inc. (GS) has a surprisingly simple method: find companies that can consistently grow their sales by at least 10%. They call it the “Rule of 10,” and in 2025, 21 companies in the S&P 500 make the cut, including some of the fast-growing companies that we discuss below.
Key Takeaways
- Goldman Sachs created the “Rule of 10” to identify the next wave of stocks poised to soar in value.
- To pass the test, companies must consistently generate sales growth of 10% and be capable of continuing to do so in the future.
- In early 2025, 21 S&P 500 stocks meet Goldman’s revenue criteria.
- Investment decisions shouldn’t just be based on the results of one stock screen.
What Is the Rule of 10?
Goldman Sachs figured a good way to identify the stocks with the most potential to outperform the S&P 500 was to analyze what made today’s biggest winners—the so-called “Magnificent Seven” made up of Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN), Apple Inc. (AAPL), Meta Platforms, Inc. (META), Microsoft Corporation (MSFT), NVIDIA Corp. (NVDA), and Tesla, Inc. (TSLA)—so successful and popular. Armed with that information, the bank’s analysts could then build a screen that reveals the future growth engines of the stock market.
The name of this screen is the “Rule of 10.”
How the Rule of 10 Works
To pass the test, companies must meet the following conditions:
- Be in the S&P 500 Index.
- Have grown revenues by at least 10% in each of the past two years.
- Be expected to grow sales by at least 10% in the present year, the next fiscal year, and the fiscal year after that.
Stocks that Meet the Rule of 10 Criteria
We screened the S&P 500 for companies with at least 10% revenue growth in 2022 and 2023 (the previous years) and forecasted sales growth of at least 10% in 2024, 2025, 2026, and 2027. The following stocks, as of Jan. 28, 2025, passed the test.
How Can Investors Find the Rule of 10 Stocks?
The stocks that pass the “Rule of 10” test are subject to change as years pass and revenue growth projections are adjusted by analysts. If you want to see which stocks Goldman thinks have a decent chance of outperforming the market in the future, you’ll need to input the criteria mentioned above into a screening tool.
It’s also possible to gather the relevant data for each stock in the S&P 500, but that would take much longer.
The Bottom Line
Goldman Sachs’s “Rule of 10” aims to identify the next wave of S&P 500 stocks capable of delivering the most capital appreciation by focusing on past and future revenues. It’s a stock screen, which means it’s designed to be a starting point for generating ideas—not a final list for entering investment orders today.
