Growth stocks have tumbled this year amid a widespread bear market plunge, but a host of Wall Street banks believe the situation is turning now. Investors have pivoted away from growth stocks – such as technology – and value as soaring inflation and rising interest rates prompt them to call for safer bets in a volatile market. Higher interest rates have a greater impact on growth stocks because they generate most of their future cash flows and earnings. But market sentiment seems to be changing. Of the 10 major sectors on the S&P 500, nine have posted gains over the past month, according to FactSet data, according to FactSet data. That includes a wide range of growth sectors such as technology, industry, media services, and materials. Wells Fargo said the tightening cycle is providing a “solid backdrop” for growth stocks. The bank’s analysts, led by Christopher Harvey, said in a note on July 27. Given the opportune time to buy certain names, Wells Fargo believes the pace of rate hikes. could slow down now, with the Fed “almost done” with the “heavy lifting”. The Fed has raised its benchmark interest rate by 225 basis points since March in an effort to rein in hot inflation. Harvey is expected to raise rates by 75 basis points to 100 basis points in November. Goldman Sachs sees buying opportunities emerging in the sector in the near term. Ryan Hammond, Goldman’s equity strategist, said in a note on July 25. “Valuation in growth stocks is no longer expensive, but not as severe,” said Ryan Hammond, equity strategist. of Goldman, said in a note on July 25. “In line with history, we expect investors to reward higher quality growth stocks but continue to avoid unprofitable Mr. growth stocks will be required to enter financial markets at a time when the cost of capital is rising. Stocks that banks like Goldman sift through for growth stocks that are expected to be profitable in the near term are trading at fair valuations. Thursday, the company reported adjusted earnings before interest, taxes, depreciation and amortization of $79.1 million for the second quarter, easily beating the FactSet consensus average. at 20.2 million dollars. The company also beat revenue, up 30% from a year earlier to $991 million, compared with FactSet estimates of $989 million. Other stocks that made the Goldman list include cloud communications company RingCentral, online auto marketplace CarGurus and advertising agency Digital Turbine. Stocks highlighted by Wells Fargo include Meta, Netflix, PayPal and Pinterest in the tech space, as well as consumer stocks like Starbucks and Mattel. JPMorgan is also advocating a rotation to growth stocks and names a bunch of buy-rated US and European growth stocks that have fallen at least 40% from their 12-month highs. They include Zoom Video and data analytics company Palantir in the tech sector, as well as Snap and online dating service Match Group in media services. The bank also highlighted chip equipment maker ASML and Dutch e-commerce company Adyen.