The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. Keeping that in mind, here are two S&P 500 stocks leading the market forward and one that could be in trouble.
One Stock to Sell:
Disney (DIS)
Market Cap: $179.5 billion
Founded by brothers Walt and Roy, Disney (NYSE: DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.
Why Should You Sell DIS?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 9.5% over the last five years was below our standards for the consumer discretionary sector
- Poor expense management has led to an operating margin of 14.8% that is below the industry average
- Low free cash flow margin of 8.2% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $100.79 per share, Disney trades at 14.6x forward P/E. Dive into our free research report to see why there are better opportunities than DIS.
Two Stocks to Buy:
KLA Corporation (KLAC)
Market Cap: $238.1 billion
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why Is KLAC a Top Pick?
- Impressive 15.2% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Superior product capabilities and pricing power lead to a best-in-class gross margin of 61%
- Robust free cash flow margin of 30.5% gives it many options for capital deployment
KLA Corporation is trading at $1,689 per share, or 39.2x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Micron (MU)
Market Cap: $584.7 billion
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NASDAQ: MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Why Are We Bullish on MU?
- Annual revenue growth of 78.2% over the past two years was outstanding, reflecting market share gains this cycle
- Highly efficient business model is illustrated by its impressive 38.3% operating margin, and its rise over the last five years was fueled by some leverage on its fixed costs
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 43% over the last five years outstripped its revenue performance
Micron’s stock price of $523.38 implies a valuation ratio of 5.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
