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 are two industry titans with attractive long-term potential and one that could be stalling.
One mega-cap stock to sell:
Walmart (WMT)
Market cap: $962 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 Wary of 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
- Widely-available products (and therefore stiff competition) result in an inferior gross margin of 24.9% that must be offset through higher volumes
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
Walmart’s stock price of $123.24 implies a valuation ratio of 39.5x forward P/E. Check out our free in-depth research report to learn more about why WMT doesn’t pass our bar.
Two mega-cap stocks to watch:
Microsoft (MSFT)
Market cap: $3.94 trillion
Originally named "Micro-soft" for microcomputer software when founded in 1975, Microsoft (NASDAQ: MSFT) is a global technology company that develops software, cloud services, devices, and AI solutions for consumers, businesses, and organizations worldwide.
Why Should You Buy MSFT?
- Microsoft is one of the great brands not just in tech but all of business. It produces mission-critical software and bundles it together, resulting in cream-of-the-crop gross margins.
- The company’s elite unit economics lead to robust profit margins that improve over time. This speaks to the scale advantages and operating efficiency across its diverse portfolio, which spans everything from Office and Azure to Minecraft.
- Microsoft has a virtuous cycle of returns. Its dominant market position enables it to generate strong free cash flow, and it reinvests these funds into promising ventures that further strengthen its competitive moat.
Microsoft is trading at $529.25 per share, or 25.6x forward price-to-earnings. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
AMD (AMD)
Market cap: $924.7 billion
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
Why Could AMD Be a Winner?
- Market share has increased this cycle as its 25.4% annual revenue growth over the last five years was exceptional
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 66.9%
- Earnings growth has easily exceeded the peer group average over the last five years as its EPS has compounded at 22.6% annually
At $528.00 per share, AMD trades at 51.7x 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.
