The Nasdaq 100 (^NDX) is home to some of the biggest success stories in tech and growth investing. However, certain stocks in the index face challenges like profitability concerns, rising costs, or shifts in market trends.
Even among high-growth companies, some are struggling, which is why we built StockStory - to help you separate winners from losers. 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:
Texas Instruments (TXN)
Market Cap: $263.9 billion
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.
Why Is TXN Not Exciting?
- The company has faced growth challenges as its 3% annual revenue increases over the last five years fell short of other semiconductor companies
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 14.2 percentage points
- Earnings per share have dipped by 1.7% annually over the past five years, which is concerning because stock prices follow EPS over the long term
Texas Instruments is trading at $289.51 per share, or 30.7x forward P/E. To fully understand why you should be careful with TXN, check out our full research report (it’s free).
Two Stocks to Watch:
Applied Materials (AMAT)
Market Cap: $413.2 billion
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 Does AMAT Stand Out?
- Demand will likely accelerate over the next 12 months as its forecasted revenue growth of 43.7% is above its two-year trend
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 29.9%
- ROIC punches in at 45.6%, illustrating management’s expertise in identifying profitable investments
Applied Materials’s stock price of $521.08 implies a valuation ratio of 30.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Costco (COST)
Market Cap: $417.5 billion
Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ:COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.
Why Is COST Interesting?
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 7.1% over the past two years
- Massive revenue base of $303.2 billion makes up for its weaker gross margin and makes it a household name that influences purchasing decisions
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its rising returns show it’s making even more lucrative bets
At $940.74 per share, Costco trades at 41x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.