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 best left off your watchlist.
One Stock to Sell:
PepsiCo (PEP)
Market Cap: $196.4 billion
With a history that goes back more than a century, PepsiCo (NASDAQ: PEP) is a household name in food and beverages today and best known for its flagship soda.
Why Are We Hesitant About PEP?
- Falling unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Estimated sales growth of 4.3% for the next 12 months is soft and implies weaker demand
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 1.2 percentage points
At $145.85 per share, PepsiCo trades at 16.4x forward P/E. To fully understand why you should be careful with PEP, check out our full research report (it’s free).
Two Stocks to Buy:
Broadcom (AVGO)
Market Cap: $1.83 trillion
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ: AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Why Will AVGO Outperform?
- Annual revenue growth of 33.1% over the past two years was outstanding, reflecting market share gains this cycle
- Offerings are mission-critical for businesses and result in a best-in-class gross margin of 76.6%
- Strong free cash flow margin of 41.9% enables it to reinvest or return capital consistently
Broadcom’s stock price of $394.81 implies a valuation ratio of 24.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Lululemon (LULU)
Market Cap: $13.84 billion
Originally serving yogis and hockey players, Lululemon (NASDAQ: LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Why Are We Bullish on LULU?
- Bold push to open new stores demonstrates an ambitious strategy to establish itself in underpenetrated territories
- Differentiated product assortment leads to a best-in-class gross margin of 57.5%
- Healthy operating margin of 20.8% shows it’s a well-run company with efficient processes
Lululemon is trading at $116.16 per share, or 10.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
