Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market’s punishment can be swift and severe when trajectories fall.
The risks that can come from buying these assets are precisely why we started StockStory — to isolate the long-term winners from the losers so you can invest with confidence. On that note, here is one growth stock expanding its competitive advantage and two whose momentum may slow.
Two Growth Stocks to Sell:
Sphere Entertainment (SPHR)
One-Year Revenue Growth: +23.4%
Famous for its viral Las Vegas Sphere venue, Sphere Entertainment (NYSE: SPHR) hosts live entertainment events and distributes content across various media platforms.
Why Do We Avoid SPHR?
- 10.8% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Projected 2.6 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Negative earnings profile makes it challenging to secure favorable financing terms from lenders
At $173.34 per share, Sphere Entertainment trades at 19.7x forward EV-to-EBITDA. If you’re considering SPHR for your portfolio, see our FREE research report to learn more.
SoundHound AI (SOUN)
One-Year Revenue Growth: +54.6%
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
Why Are We Cautious About SOUN?
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
SoundHound AI is trading at $7.39 per share, or 12.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than SOUN.
One Growth Stock to Buy:
DexCom (DXCM)
One-Year Revenue Growth: +15.5%
Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.
Why Will DXCM Beat the Market?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 12% over the past two years
- Free cash flow margin expanded by 20.2 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Improving returns on capital reflect management’s ability to monetize investments
DexCom’s stock price of $89.92 implies a valuation ratio of 31.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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.
