Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match. The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.
Finding the right balance between price and quality can challenge even the most skilled investors. Luckily for you, we started StockStory to help you identify the real opportunities. That said, here are three high-flying stocks expanding their competitive advantages.
Lam Research (LRCX)
Forward P/E Ratio: 35.6x
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Why Do We Love LRCX?
- Impressive 24.8% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Healthy operating margin of 33.8% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last five years
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
Lam Research is trading at $332.03 per share, or 35.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Powell (POWL)
Forward P/E Ratio: 31.6x
Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE: POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.
Why Should You Buy POWL?
- Annual revenue growth of 20.5% over the last five years was superb and indicates its market share increased during this cycle
- Additional sales over the last two years increased its profitability as the 22.2% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin jumped by 25.2 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Powell’s stock price of $214.75 implies a valuation ratio of 31.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Axon (AXON)
Forward P/E Ratio: 68.5x
Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
Why Are We Bullish on AXON?
- ARR growth averaged 36.9% over the past two years, showing customers are willing to take multi-year bets on its offerings
- Market share will likely rise over the next 12 months as its expected revenue growth of 32.5% is robust
- Earnings per share grew by 23.2% annually over the last two years, massively outpacing its peers
At $611.85 per share, Axon trades at 68.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
