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.
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 is one Nasdaq 100 stock that could lead the market and two best left off your watchlist.
Two Stocks to Sell:
Palo Alto Networks (PANW)
Market Cap: $295.6 billion
Founded in 2005 by security visionary Nir Zuk who sought to reimagine firewall technology, Palo Alto Networks (NASDAQ: PANW) provides AI-powered cybersecurity platforms that protect organizations' networks, clouds, and endpoints from sophisticated threats.
Why Are We Cautious About PANW?
- Gross margin of 72% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Efficiency has decreased over the last year as its operating margin fell by 1.5 percentage points
Palo Alto Networks is trading at $361.61 per share, or 22x forward price-to-sales. To fully understand why you should be careful with PANW, check out our full research report (it’s free).
Walmart (WMT)
Market Cap: $894 billion
Known for its large-format Supercenters, Walmart (NASDAQ: WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Does WMT Fall Short?
- The company has faced growth challenges as its 5.3% annual revenue increases over the last three years fell short of other consumer retail companies
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 24.9%
- Poor expense management has led to an operating margin of 4.2% that is below the industry average
At $112.79 per share, Walmart trades at 37.5x forward P/E. Read our free research report to see why you should think twice about including WMT in your portfolio.
One Stock to Watch:
AMD (AMD)
Market Cap: $786.9 billion
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
Why Does AMD Stand Out?
- Market share has increased this cycle as its 33.2% annual revenue growth over the last two years was exceptional
- Market share is on track to rise over the next 12 months as its 64.2% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings per share have comfortably outperformed the peer group average over the last five years, increasing by 22.6% annually
AMD’s stock price of $481.24 implies a valuation ratio of 47x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
