Investors favour growth stocks during bull markets because optimism and strong economic conditions tend to reward companies with high future potential. In rising markets, confidence is high, risk appetite increases, and investors become more willing to pay premium valuations for firms expected to deliver above-average earnings or revenue growth. Growth stocks, often in technology, healthcare, or consumer innovation, promise expansion and market leadership, which aligns with the momentum-driven sentiment of a bull run.

During these periods, capital inflows are strong, credit is cheaper, and consumer spending often rises. These factors create a supportive environment for growth-oriented businesses to scale rapidly. Investors also expect that earnings will compound over time, leading to faster share price appreciation compared to mature, slower-growing companies. This potential for exponential returns makes growth stocks especially attractive when markets are trending upward.

Another reason is psychological. In bull markets, fear of missing out (FOMO) often pushes traders toward high-growth names that have already shown strong performance. Media attention and positive analyst coverage amplify this effect, fueling further buying. However, while growth stocks can outperform during expansions, they are also more vulnerable to sharp corrections once optimism fades.

Overall, investors favour them in bull markets because they represent opportunity, innovation, and the promise of outsized gains in a climate of widespread confidence.