“Too big to fail” is how we would describe the megacap stocks in this article today. While they will likely stand the test of time, it’s not all sunshine and rainbows as their scale can limit their ability to find new sources of growth.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. Keeping that in mind, here are three industry titans whose competitive advantages create flywheel effects.
Amazon (AMZN)
Market Cap: $2.69 trillion
Founded by Jeff Bezos after quitting his stock-picking job at D.E. Shaw, Amazon (NASDAQ: AMZN) is the world’s largest online retailer and provider of cloud computing services.
Why Are We Fans of AMZN?
- Amazon revolutionized the way consumers shop. This isn’t the only tailwind to its impressive revenue growth, as its highly profitable AWS segment has also driven top-line momentum.
- The company’s best-in-class revenue growth coupled with modest operating leverage on its past infrastructure investments has led to elite EPS growth over a multi-year period.
- Though dominant, Amazon’s capital-intensive e-commerce business means its profitability is structurally lower than its pure-play tech peers. Can the company pull it up, or are we reaching a ceiling?
Amazon’s stock price of $251.28 implies a valuation ratio of 30.8x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Analog Devices (ADI)
Market Cap: $213.2 billion
Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ: ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Why Are We Positive on ADI?
- Market share has increased this cycle as its 15.5% annual revenue growth over the last five years was exceptional
- Offerings are mission-critical for businesses and lead to a best-in-class gross margin of 62%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
Analog Devices is trading at $434.71 per share, or 30.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Berkshire Hathaway (BRK.A)
Market Cap: $1.03 trillion
Led by legendary investor Warren Buffett since 1965, transforming it from a struggling textile manufacturer into a corporate giant, Berkshire Hathaway (NYSE: BRK.A) is a diversified holding company that owns businesses across insurance, railroads, utilities, manufacturing, retail, and services sectors.
Why Should BRK.A Be on Your Watchlist?
- Earnings per share grew by 18.9% annually over the last two years, comfortably beating the peer group average
- Balance sheet strength has increased this cycle as its 15.9% annual tangible book value per share growth over the last five years was exceptional
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $713,688 per share, Berkshire Hathaway trades at 22x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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.
