Megacap stocks dominate their sectors and their actions influence economies worldwide. The flip side though is that their sheer size means they have less room for explosive growth as scale works against them.
Sound complicated? With StockStory, it doesn’t have to be. Our job is to find you high-quality companies that can win regardless of the conditions. Keeping that in mind, here is one industry titan whose competitive advantages create flywheel effects and two that could be stalling.
Two Mega-Cap Stocks to Sell:
IBM (IBM)
Market Cap: $225 billion
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
Why Is IBM Not Exciting?
- Annual sales growth of 4.3% over the last five years lagged behind its business services peers as its large revenue base made it difficult to generate incremental demand
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.1%
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 8.6% annually
At $237.52 per share, IBM trades at 18x forward P/E. Check out our free in-depth research report to learn more about why IBM doesn’t pass our bar.
ExxonMobil (XOM)
Market Cap: $643.3 billion
One of the successor companies to John D. Rockefeller's Standard Oil monopoly that was broken up in 1911, ExxonMobil (NYSE: XOM) explores for and produces crude oil and natural gas, refines and sells petroleum products, and manufactures petrochemicals.
Why Does XOM Worry Us?
- Gross margin of 43.9% is below its competitors, leaving less money to invest in exploration and production
- Expenses have increased as a percentage of revenue over the last five years as its EBITDA margin fell by 1.3 percentage points
ExxonMobil is trading at $156.55 per share, or 13x forward P/E. If you’re considering XOM for your portfolio, see our FREE research report to learn more.
One Mega-Cap Stock to Buy:
Micron (MU)
Market Cap: $1.06 trillion
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 Will MU Beat the Market?
- Annual revenue growth of 106% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 57.1% over the last five years outstripped its revenue performance
- Free cash flow margin jumped by 14.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Micron’s stock price of $919.70 implies a valuation ratio of 6.5x forward P/E. Is now the time to initiate a position? Find out in our full 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
