Growth Stocks To Watch As Cooler Rate Hike Odds Lift Software Interest

With the US economy unexpectedly losing 23,000 jobs in July and rate hike expectations cooling, the market mood has shifted fast. That kind of shock can punish some stocks and quietly set up others for their next chapter. This article walks through three growth stocks from our screener that are closely tied to this news, so you can see where investors may be leaning in or stepping back next.

The three stocks below are just a sample, while the full growth screen surfaced 46 more larger companies with solid balance sheets and credible growth profiles that are not covered here but may be just as interesting for you.

Head straight into the Growth Stocks screener to analyze those 46 growth ideas side by side, identify the standouts that fit your risk profile, and focus on the opportunities that appear worth your next round of research.

Karooooo (KARO)

Karooooo runs a global mobility SaaS platform that helps businesses manage vehicle fleets, mobile assets, drivers, last mile logistics and video based safety across regions including Africa, Europe, Asia Pacific, the Middle East and the US. Most of its revenue comes from the Cartrack segment, which generated about ZAR 5.2b, while Karooooo Logistics contributed roughly ZAR 596 million. The stock is valued at about US$2.0b, which puts it firmly in mid cap growth territory.

Karooooo stands out in this growth screen because it combines a large recurring subscription base in telematics and logistics software with strong operating profitability and high returns on equity. Recent results show record subscriber additions and solid revenue and earnings trends. The company is still investing heavily in global expansion and sales capacity, particularly in Southeast Asia and Europe, which creates room for further scale if demand for connected fleet and logistics tools keeps rising, especially in a lower rate backdrop that usually supports software spending. These factors also bring risks around execution, margin pressure and higher borrowings. Together with recent insider selling and a dividend that is not fully covered by free cash flow, this leaves a stock where the growth story looks appealing but clearly not risk free.

Karooooo’s global SaaS footprint and recurring subscriptions suggest a story that many investors may be only half seeing. Before assuming the growth is straightforward, read the 3 key rewards and 2 important warning signs

Build your own recurring revenue growth shortlist

Karooooo and the two other stocks in this article all came from the same screener, which means you can run the same process for your own ideas. Use our flexible Screener to mix filters like growth, balance sheet strength and risks into a watchlist that fits you, or jump straight into our curated Investing Ideas for ready made starting points.

AppFolio (APPF)

AppFolio provides a cloud based software platform that helps US property managers handle accounting, leasing, maintenance, marketing, workflows and communication in one place. All of its roughly US$1.0b in revenue comes from cloud based business management software and value added platforms, sold primarily to real estate professionals, and the company is valued at about US$6.8b.

AppFolio sits in an interesting spot for growth investors right now. It is leaning into AI to automate leasing, accounting and resident services at a time when property managers face rising labor costs and tight margins, and recent quarters show strong revenue growth and higher guidance that many investors link to that shift. A softer US jobs print has pulled rate hike expectations back, which often makes scalable SaaS models like AppFolio more appealing as funding costs ease. The trade off is real. The stock carries a premium P/E, net margins recently compressed from prior levels, the business is concentrated in the US and insider selling has picked up in 2026. If the company continues to turn AI adoption, premium tiers and value added services into durable earnings growth, that combination of quality and risk may matter more than any single macro headline.

AppFolio’s AI push, premium tiers and value added services could be reshaping what its current P/E really tells you. Scan the analyst forecasts for AppFolio to see whether the story’s key twist is hiding in plain sight.

Materialise (MTLS)

Materialise is a Belgium based 3D printing company that sells software and services to both medical and industrial customers, from hospitals and device makers to automotive and aerospace groups. It generates around €136 million from Materialise Medical, about €91 million from Materialise Manufacturing and roughly €41 million from Materialise Software, giving a broad mix across healthcare, production parts and print management tools. The stock is currently valued at about US$396 million, which puts Materialise firmly in small cap territory.

Materialise sits at the crossroads of medical devices, industrial production and 3D printing software. This combination can be an appealing mix for growth oriented investors as rate hike expectations cool. The high margin Medical segment and expanding software platforms, including CO AM and Magics, give the company exposure to recurring revenue and higher value procedures. At the same time, manufacturing work in aerospace and semiconductors keeps it plugged into long term industrial programs. Modest profit margins, relatively low forecast returns on equity and sensitivity to softer prototyping demand or currency swings mean this is not a simple growth story. The interest comes from how those strengths and pressures interact, rather than from any single metric.

Materialise sits at the intersection of medical 3D printing, software subscriptions and industrial programs, which many investors may not be fully pricing in. Read the analyst forecasts for Materialise to see what could be quietly building in the background.

Seeking Fresh Alternatives Before They Fly

Fresh stock ideas can move from quiet accumulation to full breakout faster than most investors react. Scan these under the radar lists before momentum is caught and the best entries drop. Consider these approaches.

• Target steady cash generators that can keep funding growth through cycles by reviewing the list of solid balance sheet and fundamentals (49 results) while these stronger balance sheets remain overlooked.
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• Position ahead of potential resource supply constraints by scanning the 28 best rare earth metal stocks before more investors focus on these producers.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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