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.
Even among high-growth companies, some are struggling, which is why we built StockStory - to help you separate winners from losers. That said, here is one Nasdaq 100 stock driving the future of tech and two that may struggle.
Two Stocks to Sell:
Amazon (AMZN)
Market Cap: $2.19 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 Hesitant About AMZN?
- Amazon revolutionized the way consumers shop. But its capital-intensive online retail business caps its profitability, leading to margins that lag behind its Magnificent 7 peers.
- Although Amazon Web Services is a gold mine producing mission-critical infrastructure, its outsized scale limits its growth rate compared to smaller peers such as Microsoft Azure and Google Cloud Platform.
- Returns on invested capital are well below their pre-COVID peak as the company is in the middle of an investment cycle. Will Amazon ever harvest profits or keep pushing them to the future?
At $206.51 per share, Amazon trades at 32.4x forward price-to-earnings. To fully understand why you should be careful with AMZN, check out our full research report (it’s free).
Verisk (VRSK)
Market Cap: $44.34 billion
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ: VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Why Does VRSK Worry Us?
- Muted 1.9% annual revenue growth over the last five years shows its demand lagged behind its business services peers
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 8.7% annually
Verisk is trading at $317.33 per share, or 43.9x forward P/E. Check out our free in-depth research report to learn more about why VRSK doesn’t pass our bar.
One Stock to Watch:
Autodesk (ADSK)
Market Cap: $63.17 billion
Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ: ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.
Why Are We Positive On ADSK?
- Average billings growth of 23.1% over the last year enhances its liquidity and shows there is steady demand for its products
- Software is difficult to replicate at scale and results in a best-in-class gross margin of 92%
- Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 20.3%
Autodesk’s stock price of $294.80 implies a valuation ratio of 8.9x forward price-to-sales. Is now the right time to buy? See for yourself in our full 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 5 Strong Momentum 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
