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.
With rapid innovation comes rapid change, and StockStory is here to help you identify which Nasdaq 100 stocks are still worth your money. That said, here are two Nasdaq 100 stocks driving the future of tech and one that may face some trouble.
One Stock to Sell:
Gilead Sciences (GILD)
Market Cap: $137.7 billion
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ: GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Do We Think Twice About GILD?
- Sizable revenue base leads to growth challenges as its 2.7% annual revenue increases over the last two years fell short of other healthcare companies
- Anticipated sales growth of 2.3% for the next year implies demand will be shaky
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $111.34 per share, Gilead Sciences trades at 13.4x forward P/E. To fully understand why you should be careful with GILD, check out our full research report (it’s free).
Two Stocks to Watch:
Datadog (DDOG)
Market Cap: $49.66 billion
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Will DDOG Beat the Market?
- Customers view its software as mission-critical to their operations as its ARR has averaged 26% growth over the last year
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- DDOG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Datadog’s stock price of $142.87 implies a valuation ratio of 14.1x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Atlassian (TEAM)
Market Cap: $41.89 billion
Started by two Australian university friends who funded their startup with credit cards, Atlassian (NASDAQ: TEAM) provides software tools that help teams plan, track, collaborate, and share knowledge across organizations.
Why Do We Like TEAM?
- Impressive 21.5% annual revenue growth over the last two years indicates it’s winning market share
- Software is difficult to replicate at scale and results in a stellar gross margin of 82.8%
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
Atlassian is trading at $159.51 per share, or 6.8x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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