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Goldman Sachs Group, Inc. has developed a strategy known as the “Rule of 10” to identify potential stock market champions with high growth potential. This rule focuses on companies that can consistently increase their revenues by at least 10% over time. In 2025, 21 S&P 500 companies met this criteria, indicating their potential for future growth.
The “Rule of 10” is designed to identify companies that have a track record of revenue growth and are expected to continue growing at a steady rate in the future. By analyzing companies like Alphabet Inc., Amazon.com Inc., and Apple Inc., which have seen significant success in recent years, Goldman Sachs is able to identify key factors that contribute to their growth and apply them to future stock picks.
To pass the “Rule of 10” test, companies must meet specific criteria, including being listed on the S&P 500 index, showing at least 10% revenue growth in the past two years, and being projected to continue growing at a rate of at least 10% in the current year and the next two fiscal years. By screening companies based on these criteria, Goldman Sachs is able to identify potential winners in the stock market.
Using this approach, Goldman Sachs identified several companies in early 2025 that met the “Rule of 10” criteria and were poised for future growth. By projecting sales growth for the next few years and screening the S&P 500 for companies with a history of revenue growth, they were able to identify companies with strong potential for outperforming the market.
Investors looking to identify potential winners in the stock market can use the “Rule of 10” criteria to screen for companies that meet these requirements. By using screening tools or compiling information manually for S&P 500 companies, investors can identify stocks that Goldman Sachs believes have potential for future growth.
While the “Rule of 10” is a valuable tool for identifying potential winners in the stock market, it is important to remember that this is just a starting point for investment ideas. Investors should conduct their own research and analysis before making investment decisions to ensure they are making informed choices.
In conclusion, the “Rule of 10” developed by Goldman Sachs is a valuable strategy for identifying potential stock market champions with high growth potential. By focusing on companies with a history of revenue growth and a potential for future growth, investors can identify stocks that may outperform the market in the coming years. By using screening tools and conducting research, investors can find opportunities to invest in companies that meet the criteria set forth by the “Rule of 10.”
