The Nasdaq 100 (^NDX) is home to some of the biggest success stories in tech and growth investing. However, certain stocks in the index face challenges like profitability concerns, rising costs, or shifts in market trends.
Investing in Nasdaq 100 stocks isn’t just about picking big names - it’s about finding the right ones, and that’s where StockStory comes in. That said, here is one Nasdaq 100 stock driving the future of tech and two that may struggle.
Two Stocks to Sell:
Keurig Dr Pepper (KDP)
Market Cap: $44.85 billion
Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ: KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.
Why Are We Cautious About KDP?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 6.5% over the last three years was below our standards for the consumer staples sector
- Efficiency has decreased over the last year as its operating margin fell by 5.7 percentage points
- Underwhelming 5.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $33.14 per share, Keurig Dr Pepper trades at 16x forward P/E. To fully understand why you should be careful with KDP, check out our full research report (it’s free).
Old Dominion Freight Line (ODFL)
Market Cap: $33.85 billion
With its name deriving from the Commonwealth of Virginia’s nickname, Old Dominion (NASDAQ: ODFL) delivers less-than-truckload (LTL) and full-container load freight.
Why Do We Think Twice About ODFL?
- Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
- Earnings per share have dipped by 6.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Free cash flow margin dropped by 4.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Old Dominion Freight Line’s stock price of $159.07 implies a valuation ratio of 28.4x forward P/E. Read our free research report to see why you should think twice about including ODFL in your portfolio.
One Stock to Buy:
Microsoft (MSFT)
Market Cap: $3.53 trillion
Short for microcomputer software, Microsoft (NASDAQ: MSFT) is the largest software vendor in the world with its Windows operating system, Office suite, and cloud computing services.
Why Are We Bullish on 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 $474.21 per share, or 33.5x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
