While the Nasdaq 100 (^NDX) is filled with cutting-edge technology and consumer companies, not all are on solid footing. Some are dealing with declining demand, high costs, or regulatory pressures that could limit future upside.
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. That said, here is one Nasdaq 100 stock that has huge potential and two best left off your watchlist.
Two Stocks to Sell:
Micron (MU)
Market Cap: $109.7 billion
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE: MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Why Do We Think Twice About MU?
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 21.8%
- Poor expense management has led to an operating margin of 4.1% that is below the industry average
- Negative free cash flow raises questions about the return timeline for its investments
At $98.10 per share, Micron trades at 11.2x forward P/E. To fully understand why you should be careful with MU, check out our full research report (it’s free).
Tesla (TSLA)
Market Cap: $1.10 trillion
Originally founded by Martin Eberhard and Marc Tarpenning in 2003, Tesla (NASDAQ: TSLA) is an electric vehicle company accelerating the world’s transition to sustainable energy.
Why Is TSLA Not Exciting?
- Tesla's scale advantage in EV production leads to gross margins that exceed incumbents such as General Motors and Ford. However, a softer macroeconomic backdrop and tariff pressures have weighed on automobile sales, which are highly cyclical.
- The company's execution ability is a question mark given its long history of delays, such as the Cybertruck and Robotaxi launches. Its sizeable investments in projects with uncertain return timelines, like Optimus, also raise skepticism from investors.
- On the bright side, Tesla's Megapack product solves a critical problem for utilities needing renewable energy storage solutions. This innovation has made the energy segment the most profitable and fastest-growing business line for the company.
Tesla is trading at $341.70 per share, or 131.2x forward price-to-earnings. If you’re considering TSLA for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Paychex (PAYX)
Market Cap: $56.73 billion
One of the oldest service providers in the industry, Paychex (NASDAQ: PAYX) offers its customers payroll and HR software solutions.
Why Are We Fans of PAYX?
- Above-average gross margin of 72% gives it the ability to invest in R&D and run marketing campaigns
- Healthy operating margin of 41.5% shows it’s a well-run company with efficient processes
- Robust free cash flow margin of 29.5% gives it many options for capital deployment
Paychex’s stock price of $155.50 implies a valuation ratio of 9.6x forward price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
