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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here is one S&P 500 stock that is leading the market forward and two that may struggle.
Two Stocks to Sell:
Texas Instruments (TXN)
Market Cap: $280.5 billion
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Why Does TXN Give Us Pause?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 3.6% over the last five years was below our standards for the semiconductor sector
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 15.3 percentage points
- 10.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Texas Instruments is trading at $307.27 per share, or 37.2x forward P/E. Check out our free in-depth research report to learn more about why TXN doesn’t pass our bar.
Lowe's (LOW)
Market Cap: $125.2 billion
Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.
Why Are We Cautious About LOW?
- Products have few die-hard fans as sales have declined by 3.8% annually over the last three years
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Widely-available products (and therefore stiff competition) result in an inferior gross margin of 33.4% that must be offset through higher volumes
At $223.40 per share, Lowe's trades at 17.5x forward P/E. Read our free research report to see why you should think twice about including LOW in your portfolio.
One Stock to Buy:
Seagate (STX)
Market Cap: $180.5 billion
One of two remaining major hard drive manufacturers after decades of industry consolidation, Seagate (NASDAQ: STX) manufactures hard disk drives and solid state drives that store data in data centers, cloud systems, and consumer devices.
Why Will STX Beat the Market?
- Annual revenue growth of 32.6% over the last two years was superb and indicates its market share increased during this cycle
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Free cash flow margin increased by 9.3 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Seagate’s stock price of $803.01 implies a valuation ratio of 34.6x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
