A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.

At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here are two volatile stocks that could deliver huge gains and one that might not be worth the risk.

One Stock to Sell:

Dillard's (DDS)

Rolling One-Year Beta: 1.08

With stores located largely in the Southern and Western US, Dillard’s (NYSE: DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.

Why Are We Wary of DDS?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Forecasted revenue decline of 2.1% for the upcoming 12 months implies demand will fall off a cliff
3. Efficiency has decreased over the last year as its operating margin fell by 2.1 percentage points

Dillard’s stock price of $398.56 implies a valuation ratio of 9.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why DDS doesn’t pass our bar.

Two Stocks to Watch:

Dynatrace (DT)

Rolling One-Year Beta: 1.14

Founded in Austria in 2005, Dynatrace (NYSE: DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.

Why Do We Like DT?

1. Customers view its software as mission-critical to their operations as its ARR has averaged 17.6% growth over the last year
2. Software is difficult to replicate at scale and leads to a top-tier gross margin of 81.9%
3. Strong free cash flow margin of 25.4% enables it to reinvest or return capital consistently

Dynatrace is trading at $55.20 per share, or 8.6x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.

Applied Materials (AMAT)

Rolling One-Year Beta: 1.79

Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ: AMAT) is the largest provider of semiconductor wafer fabrication equipment.

Why Are We Fans of AMAT?

1. Market share has increased this cycle as its 12.7% annual revenue growth over the last five years was exceptional
2. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 29.3%, and its profits increased over the last five years as it scaled
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

At $173.50 per share, Applied Materials trades at 18.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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