The Nasdaq 100 (^NDX) is known for housing some of the most innovative and fastest-growing companies in the market. But not every stock in the index is a winner - some are struggling with slowing growth, increasing competition, or unsustainable valuations.
Even among high-growth companies, some are struggling, which is why we built StockStory - to help you separate winners from losers. That said, here are three Nasdaq 100 stocks that don’t make the cut and some better choices instead.
Microchip Technology (MCHP)
Market Cap: $26.49 billion
Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.
Why Do We Avoid MCHP?
- Sales tumbled by 4.2% annually over the last five years, showing market trends are working against its favor during this cycle
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 14.5 percentage points
Microchip Technology’s stock price of $49.47 implies a valuation ratio of 25x forward P/E. Dive into our free research report to see why there are better opportunities than MCHP.
PACCAR (PCAR)
Market Cap: $51.26 billion
Founded more than a century ago, PACCAR (NASDAQ: PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.
Why Does PCAR Worry Us?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Forecasted revenue decline of 5.2% for the upcoming 12 months implies demand will fall even further
- Earnings per share have dipped by 19.6% annually over the past two years, which is concerning because stock prices follow EPS over the long term
PACCAR is trading at $97.63 per share, or 19.5x forward P/E. To fully understand why you should be careful with PCAR, check out our full research report (it’s free for active Edge members).
Regeneron (REGN)
Market Cap: $75.62 billion
Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ: REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders.
Why Does REGN Give Us Pause?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.3% for the last two years
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 23.8 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $741.72 per share, Regeneron trades at 16.6x forward P/E. Check out our free in-depth research report to learn more about why REGN doesn’t pass our bar.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 244% over the last five years (as of June 30, 2025).
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 Kadant (+351% 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
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