The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.
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:
Walmart (WMT)
Market cap: $979.9 billion
Known for its large-format Supercenters, Walmart (NASDAQ: WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Are We Hesitant About WMT?
- The company has faced growth challenges as its 5.3% annual revenue increases over the last three years fell short of other consumer retail companies
- Gross margin of 24.9% is below its competitors, leaving less money for marketing and promotions
- Poor expense management has led to an operating margin of 4.3% that is below the industry average
Walmart is trading at $123.52 per share, or 40.4x forward P/E. Read our free research report to see why you should think twice about including WMT in your portfolio.
Two stocks to buy:
Monolithic Power Systems (MPWR)
Market cap: $59.12 billion
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Why Are We Bullish on MPWR?
- Impressive 27.6% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Additional sales over the last five years increased its profitability as the 29.9% annual growth in its earnings per share outpaced its revenue
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Monolithic Power Systems’s stock price of $1,216 implies a valuation ratio of 28.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Ross Stores (ROST)
Market cap: $72.92 billion
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ: ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Is ROST a Top Pick?
- New store openings and solid same-store sales performance have boosted its top-line growth
- Locations open for at least a year are seeing increased demand as same-store sales have averaged 6.1% growth over the past two years
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its rising returns show it’s making even more lucrative bets
At $228.00 per share, Ross Stores trades at 27.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-quality stocks for all market conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
