While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. That said, here is one S&P 500 stock that is leading the market forward and two that may struggle.
Two Stocks to Sell:
Intel (INTC)
Market Cap: $89.33 billion
Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is a leading manufacturer of computer processors and graphics chips.
Why Do We Avoid INTC?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 7.6% annually over the last five years
- Inability to adjust its cost structure while its revenue declined over the last five years led to a 49.2 percentage point drop in the company’s operating margin
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 39.4 percentage points
At $20.55 per share, Intel trades at 65.2x forward P/E. Dive into our free research report to see why there are better opportunities than INTC.
Walmart (WMT)
Market Cap: $824.9 billion
Known for its large-format Supercenters, Walmart (NYSE: WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Do We Think Twice About WMT?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 4.8% over the last six years was below our standards for the consumer retail sector
- Gross margin of 24.7% is below its competitors, leaving less money for marketing and promotions
- Incremental sales over the last six years were much less profitable as its earnings per share fell by 10.9% annually while its revenue grew
Walmart is trading at $103.11 per share, or 38.6x forward P/E. Check out our free in-depth research report to learn more about why WMT doesn’t pass our bar.
One Stock to Watch:
Applied Materials (AMAT)
Market Cap: $143 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 Are We Fans of AMAT?
- Annual revenue growth of 12.7% over the past five years was outstanding, reflecting market share gains this cycle
- 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
- Industry-leading 47.6% return on capital demonstrates management’s skill in finding high-return investments
Applied Materials’s stock price of $181.50 implies a valuation ratio of 18.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2024 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 6 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-small-cap company Comfort Systems (+782% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
