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.

Investing in Nasdaq 100 stocks isn’t just about picking big names - it’s about finding the right ones, and that’s where StockStory comes in. Keeping that in mind, here are two Nasdaq 100 stocks that have huge potential and one that may face some trouble.

One Stock to Sell:

Tesla (TSLA)

Market Cap: $1.54 trillion

Originally founded by Martin Eberhard and Marc Tarpenning in 2003, Tesla (NASDAQ: TSLA) is an electric vehicle company accelerating the world’s transition to sustainable energy.

Why Do We Avoid TSLA?

1. Tesla's scale advantage in EV production leads to gross margins that exceed incumbents such as General Motors and Ford. However, a softer macroeconomic backdrop and tariff pressures have weighed on automobile sales, which are highly cyclical.
2. The company's execution ability is a question mark given its long history of delays, such as the Cybertruck and Robotaxi launches. Its sizeable investments in projects with uncertain return timelines, like Optimus, also raise skepticism from investors.
3. On the bright side, Tesla's Megapack product solves a critical problem for utilities needing renewable energy storage solutions. This innovation has made the energy segment the most profitable and fastest-growing business line for the company.

Tesla’s stock price of $460.37 implies a valuation ratio of 225.1x forward price-to-earnings. To fully understand why you should be careful with TSLA, check out our full research report (it’s free for active Edge members).

Two Stocks to Watch:

Electronic Arts (EA)

Market Cap: $50.07 billion

Best known for its Madden NFL and FIFA sports franchises, Electronic Arts (NASDAQ: EA) is one of the world’s largest video game publishers.

Why Should EA Be on Your Watchlist?

1. Platform is difficult to replicate at scale and leads to a top-tier gross margin of 78.5%
2. Word-of-mouth marketing drives organic user growth, eliminating the need for costly advertising campaigns
3. Strong free cash flow margin of 25% enables it to reinvest or return capital consistently

At $201 per share, Electronic Arts trades at 15.2x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

Cintas (CTAS)

Market Cap: $74.67 billion

Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.

Why Will CTAS Beat the Market?

1. Annual revenue growth of 8.5% over the last five years beat the sector average and underscores the unique value of its offerings
2. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 15.9% exceeded its revenue gains over the last five years
3. Robust free cash flow margin of 16.2% gives it many options for capital deployment

Cintas is trading at $186.09 per share, or 37.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out 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 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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