Thursday’s US growth report gave investors a reason to look beyond recession fears. The economy expanded at a 3.4% annualised pace in the third quarter, up from 2.2% in the second. Consumer spending and investment helped drive the expansion. The economy was still creating business opportunities.

But a growing economy does not make every growth stock a good investment. Alphabet’s results showed why. Its cloud business expanded rapidly, yet the group spent more on capital projects than it generated in operating cash, leaving quarterly free cash flow at roughly minus $9 billion. That is the cash remaining after investment in assets such as servers and data centres. Investors marked the shares down because strong demand alone could not answer how much spending would be needed to sustain it.

The more revealing signal was what did not fall with Alphabet. Most US shares advanced even as the Nasdaq dropped about 1.4%, and the Russell 2000 index of smaller companies gained about 1%. Large companies have a bigger influence on the main indices, so a handful of heavyweights can pull the headline down while many businesses rise. This was evidence of investors finding alternatives, rather than abandoning shares across the board.

Eli Lilly supplied one such alternative. Quarterly revenue rose 39%, driven primarily by its diabetes and obesity medicines, and the company lifted its annual revenue outlook. Its shares rose. Meanwhile, software companies faced a tougher reception when their outlooks fell short of expectations. The distinction was not simply technology versus everything else: investors were testing whether the next stage of growth justified the price already paid for it.

That is a useful change in emphasis, but one session does not establish a lasting shift in market leadership. September inflation, measured by the US Central Bank’s preferred personal consumption expenditures (PCE) index, accelerated to 3.6% from a year earlier. Higher living costs can still squeeze customers and keep borrowing expensive. Our preference is to broaden the search for credible earnings, while checking each business’s spending needs and valuation. An attractive industry does not excuse an unattractive purchase price.