Rule of 10’s investing is gaining serious traction in the financial world. With the constant search for the next Amazon or Nvidia, investors are increasingly turning to data-driven frameworks to identify high-growth companies before they explode in value. One such method, brought into the spotlight by Goldman Sachs, is the “Rule of 10’s.” This simple yet powerful rule filters companies that show consistent double-digit revenue growth, both historically and in projection, offering a smart roadmap for spotting future market leaders. In 2025, 21 companies within the S&P 500 matched this criterion, giving investors insight into which stocks may become tomorrow’s giants. But this method isn’t about blind allegiance to metrics—it’s a disciplined way to start digging into opportunities. This article explores what the Rule of 10’s is, how to apply it, and how it helps investors stay ahead of the curve while identifying great businesses with explosive potential.
Understanding the Rule of 10s: A Blueprint for Growth
Goldman Sachs developed the Rule of 10’s to dissect what made modern stock titans—think Apple, Amazon, and Nvidia—so wildly successful. Their analysts discovered a compelling commonality among these market champions: consistent sales growth of 10% or more over multiple years. This threshold was not just a coincidence; it was a signal of scalable business models and growing market demand.
The Rule of 10’s isn’t just a backtest or historical observation. It’s a forward-looking screen. To pass, companies must have increased revenue by at least 10% annually over the last two years and be forecasted to continue doing so over the next three. That consistency reflects a rare breed of corporate momentum, resilience, and scalability that’s crucial for long-term investing success.
In this sense, the Rule of 10’s acts as a filter for identifying what could be the “next 10x stock”—companies that don’t just grow but scale exponentially.
Why Revenue Growth Matters More Than Ever
Revenue is the lifeblood of any business. While earnings can be manipulated through accounting techniques or short-term cost-cutting, top-line sales reflect genuine demand. Companies consistently growing revenue by double digits are often expanding into new markets, winning customers, or launching in-demand products.
In today’s fast-moving economy, strong revenue growth is also a proxy for innovation. Whether it’s AI chips, e-commerce platforms, or next-gen medical devices, industries that show rapid change often reward the first movers. Applying the Rule of 10s can help you spot companies at the forefront of these revolutions.
Moreover, institutional investors love companies with sustainable revenue trajectories. When mutual funds, hedge funds, and pensions identify that growth curve, they pile in, creating tailwinds for stock prices. It’s one of the key reasons these firms become “good stocks now” and tend to dominate market cap rankings over time.
The Current State of the Rule of 10’s Universe
As of early 2025, Goldman Sachs found 21 S&P 500 companies that fit the Rule of 10’s criteria. This means they grew their revenues by at least 10% in both 2022 and 2023, and are projected to maintain that momentum through 2026 and 2027.
These firms span a variety of sectors—tech, healthcare, fintech, and industrials. It’s not just the usual suspects like Apple or Microsoft anymore. For example, companies like Intuitive Surgical and Synopsys have emerged as standout growth candidates, thanks to their dominance in niche markets like robotic surgery and chip design.
Interestingly, companies like Alphabet and Amazon narrowly missed the cut due to short-term growth slowdowns, reminding us that even giants face growing pains. Still, the Rule of 10’s isn’t about punishing temporary setbacks; it’s about identifying consistent outperformance over time.
These 21 companies aren’t necessarily “what stocks to invest in right now”, but they do warrant deeper analysis as potential market leaders.
How to Find Rule of 10’s Stocks on Your Own
You don’t need Goldman Sachs to tell you where the growth is. You can use stock screening tools like Finviz, Morningstar, or Yahoo Finance to input Rule of 10’s criteria:
- Filter for S&P 500 companies
- Set revenue growth filters: >10% for the last two years
- Add forward revenue estimates for the next three years
This strategy takes time, especially when cross-referencing forward estimates. But it’s an effective way to uncover “great stocks to invest in today” that are flying under the radar.
For investors with less time or expertise, ETFS focused on growth, innovation, or sector-specific themes (like AI or biotech) often hold many Rule of 10’s candidates. These can serve as a shortcut to participate in the strategy without building a custom portfolio from scratch.
Rule of 10’s vs. Other Investment Strategies
There are plenty of “investment rules” out there—from value investing principles to momentum trading to dividend strategies. What sets the Rule of 10’s apart is its simplicity and its dual focus on historical and forecasted growth.
Whereas other methods may lean heavily on valuation (price-to-earnings, price-to-book), the Rule of 10’s is unapologetically growth-oriented. It doesn’t ignore fundamentals—it just prioritises them differently. This strategy assumes that consistent revenue growth, especially in large-cap companies, signals durable business advantages.
It’s also more dynamic than classic growth investing, which often uses backwards-looking data. By factoring in analyst projections, the Rule of 10’s emphasises future scalability—a critical component for finding “stocks to purchase today” that will still be thriving five years from now.
Avoiding the Pitfalls of Overreliance
While the Rule of 10’s is a useful starting point, it’s not the end of the research process. No single metric can capture everything about a company’s investment potential. Some companies may pass the revenue screen but face regulatory headwinds, competitive threats, or internal inefficiencies that limit returns.
That’s why Goldman Sachs stresses that the Rule of 10’s is a screen, not a recommendation. Once a stock makes the list, investors should dig into fundamentals like margin expansion, balance sheet strength, and capital allocation strategy. A company with 10% revenue growth but shrinking profits or rising debt may not be a good investment.
Additionally, market expectations can be priced in. If a company is already trading at sky-high multiples, even great results may not move the needle. The Rule of 10’s can help identify “good stocks in invest in”, but only due diligence reveals whether they’re good at today’s prices.
How Past Market Giants Matched the Rule
The Rule of 10’s isn’t just theoretical—it’s retroactively accurate. Most of the “Magnificent Seven” (Apple, Amazon, Meta, Microsoft, Alphabet, Nvidia, Tesla) would have qualified during their early years of hypergrowth. Their ability to post double-digit revenue gains year after year was a key reason institutional money flowed into them.
Take Amazon: between 2005 and 2015, it posted double-digit sales increases almost every year. Its early ecommerce dominance, followed by AWS, turned Amazon into a “next 10x stock” long before it became a trillion-dollar business.
Nvidia followed a similar arc, with rapid GPU adoption in gaming, followed by a massive pivot into AI. Its steady 10%+ revenue growth, combined with explosive margin expansion, made it a darling of Rule of 10’s adherents.
These case studies show how consistent sales growth is often a leading indicator of future dominance.
Macroeconomic Forces That Influence Rule Stocks
Macroeconomic factors can amplify or diminish the effectiveness of the Rule of 10’s strategies. During periods of low interest rates, growth stocks tend to outperform as future earnings become more valuable in discounted cash flow models. In contrast, rising rates may challenge high-growth valuations.
That’s why understanding the macro backdrop matters. If the economy is slowing or if inflation is rising, even high-revenue-growth companies can face multiple compressions. That doesn’t mean you abandon Rule of 10’s logic—it just means you need to be more selective and valuation-conscious.
For instance, many high-growth tech companies in 2024 faced pullbacks not because they stopped growing, but because investors rotated into value stocks amid inflation concerns. The Rule of 10’s still highlighted strong businesses, just ones temporarily out of favour.
Incorporating Rule of 10’s into Your Portfolio Strategy
If you’re building a long-term portfolio, use the Rule of 10s to allocate a portion to high-growth equity. This could be 20-40% of your stock exposure, depending on your risk tolerance and time horizon.
Balance this with dividend payers, cyclical names, and low-volatility ETFS to manage drawdowns. This hybrid approach gives you the upside potential of breakout stocks, without overexposing yourself to tech-sector risks.
If you’re a trader, you can use the Rule of 10s to narrow your watchlist. Stocks that meet the criteria are often in strong uptrends, providing opportunities for swing trading or earnings-season plays.
Regardless of your strategy, remember that even the best rules work best when part of a broader plan.
What to Watch in the Near Future
Looking ahead, sectors like AI, biotech, clean energy, and financial technology are fertile ground for Rule of 10’s stocks. These industries are in rapid evolution, and the companies that dominate them are likely to meet or exceed the growth thresholds.
In addition, keep an eye on emerging markets. As globalisation expands and digital adoption grows, companies based in India, Southeast Asia, and Latin America could enter the Rule of 10’s radar. Just like U.S. tech firms did in the 2000s, international players could soon become household names.
Economic conditions will play a role. If the U.S. Federal Reserve eases interest rates, growth stocks could benefit disproportionately, particularly those already showing strong revenue momentum.
Final Thoughts: From Rule to Reality
The Rule of 10’s offers a powerful, research-backed framework for identifying companies with explosive growth potential. By screening for consistent, double-digit revenue growth—both historical and projected—you can uncover businesses that may be tomorrow’s market leaders.
But rules are only as good as their execution. The Rule of 10’s should be the beginning of your investment journey, not the end. Combine it with fundamental analysis, valuation scrutiny, and macro awareness to build a smarter, more resilient portfolio.
In a market flooded with noise, the Rule of 10’s is a rare signal—one that echoes through the success stories of the past and hints at the breakout stars of the future.
If you want to discover “stocks to purchase today” that might become the next Apple or Nvidia, the Rule of 10’s is a strategy worth mastering—again and again, from the start, through the middle, and until the end of every market cycle.