The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here is one S&P 500 stock that is leading the market forward and two that may struggle.
Two Stocks to Sell:
General Dynamics (GD)
Market Cap: $87.41 billion
Creator of the famous M1 Abrahms tank, General Dynamics (NYSE: GD) develops aerospace, marine systems, combat systems, and information technology products.
Why Are We Wary of GD?
- Sales pipeline suggests its future revenue growth may not meet our standards as its average backlog growth of 2.1% for the past two years was weak
- Estimated sales growth of 3.5% for the next 12 months implies demand will slow from its two-year trend
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 5.8% annually
General Dynamics’s stock price of $327.53 implies a valuation ratio of 21x forward P/E. To fully understand why you should be careful with GD, check out our full research report (it’s free).
Thermo Fisher (TMO)
Market Cap: $184.3 billion
With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE: TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.
Why Are We Cautious About TMO?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 10.2 percentage points
- Waning returns on capital imply its previous profit engines are losing steam
Thermo Fisher is trading at $487.50 per share, or 20.9x forward P/E. Read our free research report to see why you should think twice about including TMO in your portfolio.
One Stock to Buy:
Palantir Technologies (PLTR)
Market Cap: $371.8 billion
Named after the all-seeing stones in "Lord of the Rings," Palantir Technologies (NASDAQ: PLTR) develops software platforms that help government agencies and enterprises integrate, analyze, and operationalize their data for decision-making.
Why Is PLTR a Good Business?
- Average billings growth of 44.2% over the last year enhances its liquidity and shows there is steady demand for its products
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- PLTR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $154.73 per share, Palantir Technologies trades at 82.1x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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 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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