Large-cap stocks are known for their staying power and ability to weather market storms better than smaller competitors. However, their sheer size makes it more challenging to maintain high growth rates as they’ve already captured significant portions of their markets.
This is precisely where StockStory comes in - our job is to find you high-quality companies that can win regardless of the conditions. Keeping that in mind, here are three large-cap stocks that may face near-term headwinds and some other investments you should consider instead.
Analog Devices (ADI)
Market Cap: $157.4 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 Do We Think Twice About ADI?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.4% annually over the last two years
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Analog Devices’s stock price of $321.96 implies a valuation ratio of 32.1x forward P/E. If you’re considering ADI for your portfolio, see our FREE research report to learn more.
NXP Semiconductors (NXPI)
Market Cap: $55.9 billion
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
Why Are We Cautious About NXPI?
- Sales tumbled by 3.9% annually over the last two years, showing market trends are working against its favor during this cycle
- Estimated sales growth of 10.6% for the next 12 months is soft and implies weaker demand
At $222.13 per share, NXP Semiconductors trades at 16.3x forward P/E. Dive into our free research report to see why there are better opportunities than NXPI.
Target (TGT)
Market Cap: $50.19 billion
With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE: TGT) serves the suburban consumer who is looking for a wide range of products under one roof.
Why Are We Out on TGT?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 28%
- Subpar operating margin of 5.2% constrains its ability to invest in process improvements or effectively respond to new competitive threats
Target is trading at $109.50 per share, or 15x forward P/E. Read our free research report to see why you should think twice about including TGT in your portfolio.
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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
