Megacap stocks are behemoths that set the tone for their industries, and their massive scale typically leads to wide moats. However, the downside is that most have already exploited their existing market opportunities and must invest heavily to expand further, a risky proposition.
This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. That said, here is one industry titan with attractive long-term potential and two that could be stalling.
Two Mega-Cap Stocks to Sell:
Walmart (WMT)
Market Cap: $839.7 billion
Known for its large-format Supercenters, Walmart (NYSE: WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Does WMT Worry Us?
- Gross margin of 24.8% is an output of its commoditized inventory
- Subpar operating margin of 4.2% constrains its ability to invest in process improvements or effectively respond to new competitive threats
At $105.40 per share, Walmart trades at 37.7x forward P/E. To fully understand why you should be careful with WMT, check out our full research report (it’s free for active Edge members).
JPMorgan Chase (JPM)
Market Cap: $811.3 billion
Tracing its roots back to 1799 when its earliest predecessor was founded by Aaron Burr, JPMorgan Chase (NYSE: JPM) is a leading financial services company offering investment banking, consumer banking, commercial banking, and asset management services globally.
Why Does JPM Fall Short?
- 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 7.9% for the last two years
- Net interest margin of 2.6% reflects its high servicing and capital costs
- Estimated tangible book value per share growth of 7% for the next 12 months implies profitability will slow from its two-year trend
JPMorgan Chase’s stock price of $298.82 implies a valuation ratio of 2.4x forward P/B. Dive into our free research report to see why there are better opportunities than JPM.
One Mega-Cap Stock to Watch:
UnitedHealth (UNH)
Market Cap: $289.8 billion
With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE: UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.
Why Do We Like UNH?
- 11.5% annual revenue growth over the last five years was better than the sector average, highlighting the value of its products and services
- Enormous revenue base of $435.2 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
- Industry-leading 20.4% return on capital demonstrates management’s skill in finding high-return investments
UnitedHealth is trading at $320.38 per share, or 18.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
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