What Are 5 Great Growth Stocks to Buy That Are Down 20% or More?
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While the market has returned to new highs, not every growth stock has rebounded at the same pace. Five stocks still down 20% or more from all-time highs that look...
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July 6, 2025
04:40 AM
The Motley Fool
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While the market has returned to new highs, not every growth stock has rebounded at the same pace
Five stocks still down 20% or more from all-time highs that look attractive are Advanced Micro Devices (AMD -0. 45%), GitLab (GTLB 2
Beauty (ELF 1. 21%), Dutch Bros (BROS 1. 74%), and Cava Group (CAVA 4
Let's look at what each of these five discounted growth stocks brings to the table
Image source: Getty Images
Advanced Micro Devices (down 35% from high) While AMD remains a distant second to market leader Nvidia in graphics cessing units (GPUs), it's starting to carve out a meaningful niche in artificial intelligence (AI) inference
That's important because the inference market is expected to become larger than AI training over time, and AMD's cost-effective chips are starting to gain traction
On its earnings call, management said one of the largest AI-model companies is now using its GPUs for a large of its daily inference workload
Major cloud viders are also turning to AMD chips for AI tasks and recommendation engines
The company already has a leadership position in data central cessing units, and its overall data center revenue has been growing strongly
Last quarter, its data center segment soared 57%, helping total revenue climb 36%
AMD doesn't need to unseat Nvidia in the GPU space, it just needs to gain a modest to drive outsized growth from its smaller base
Given the pullback in the stock, the setup here looks attractive
GitLab (down 65% from high) GitLab has become one of the most important players in secure software development
Its DevSecOps platform is helping developers build, test, and deploy applications more efficiently in a secure environment, and its recent GitLab 18 launch only strengthens that position
The release includes over 30 new enhancements, including the GitLab Duo Agent Platform, which deploys AI agents across the entire software development life cycle, not just for code but also for documentation, testing, and compliance
The company is seeing solid growth both from existing customers and new ones
Last quarter, its revenue climbed 27% year over year, while its dollar-based net retention rate was a robust 122%
Much of this growth is coming from existing customers expanding seats and upgrading to higher-tier plans
While some investors fear that AI will lead to fewer coders over time, thus far, AI has led to an increase in both software development and the number of coders
GitLab stock has fallen too much on this fear, and it looks well-positioned moving forward
Beauty (down 40% from high) After a red-hot run, e
S cooled off after the company's revenue growth slowed significantly to just 4% in its fiscal Q4
However, its recent $1 billion acquisition of Hailey Bieber's Rhode brand has the potential to reaccelerate growth in a big way
Rhode has already hit $212 million in annual sales with just a handful of ducts on its website and minimal marketing. 's strong relationships at Ulta Beauty and Target and Rhode's recent Sephora rollout, e
Has the opportunity to put the brand in front of a lot more consumers
Bieber staying on as chief creative officer ensures brand continuity, and Rhode brings with it premium price points and a strong skincare lineup, which is an ideal complement to e. 's core mass-market cosmetics strength
Has already ven it can take a lot of market in mass-market cosmetics, and Rhode adds a big potential growth driver
The company also continues to have opportunities with skincare, international expansion, and potentially moving into other adjacent fragrance over time
Dutch Bros (down 21% from high) Dutch Bros is still in the early innings of what looks a multi-year growth story
The drive-thru coffee chain now has over 1,000 locations but sees room for 7,000 over the long term
It's targeting 2,029 shops by 2029, which would still leave it with a long growth runway next decade as well
Expansion is not the only story with Dutch Bros, though
It's also had strong same-store sales growth, and has an opportunity to continue to ramp it up
Last quarter, its same-store sales rose 4. 7%, while company-owned comps climbed 6
However, mobile ordering has just recently been rolled out, and the company has just begun piloting food items
Dutch Bros has admitted that a lack of breakfast offerings has ly cost it sales, and rival Starbucks has shown just how important food items can be, with food representing 19% of its sales last quarter
Between an opportunity to grow same-store sales and expand its store base, Dutch Bros has a lot of long-term growth ahead of it
Cava Group (down 43% from high) Another strong growth story in the restaurant space is Cava
The Mediterranean restaurant operator has posted four straight quarters of double-digit same-store sales growth, including 10. 8% last quarter
More impressively, traffic was up 7. 5%, showing that customers are coming in more frequently despite price increases
Higher-priced add-ons pita chips and fresh juice are boosting ticket sizes, and the company is experimenting with new items and a tiered loyalty gram to keep customers coming back
However, Dutch Bros, Cava is very much an expansion story
The company added 15 new restaurants last quarter and plans to open 64 to 68 new locations this year
With just 382 total restaurants as of the end of last quarter and a target of 1,000 by 2032, there's a long runway ahead
Its expansion strategy, dubbed the "coastal smile," has worked well, and a recent push into the Midwest with Detroit and Chicago should accelerate growth even further
Geoffrey Seiler has positions in GitLab, LVMH Moët Hennessy - Louis Vuitton, and e
The Motley Fool has positions in and recommends Advanced Micro Devices, GitLab, Nvidia, Starbucks, Target, Ulta Beauty, and e
The Motley Fool recommends Cava Group and Dutch Bros
The Motley Fool has a disclosure policy.
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