The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. Keeping that in mind, here is one S&P 500 stock that is leading the market forward and two that could be in trouble.
Two Stocks to Sell:
PepsiCo (PEP)
Market Cap: $219.7 billion
With a history that goes back more than a century, PepsiCo (NASDAQ: PEP) is a household name in food and beverages today and best known for its flagship soda.
Why Are We Hesitant About PEP?
- Shrinking unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.8%
- Efficiency has decreased over the last year as its operating margin fell by 1.8 percentage points
PepsiCo is trading at $161.31 per share, or 18.7x forward P/E. To fully understand why you should be careful with PEP, check out our full research report (it’s free).
Franklin Resources (BEN)
Market Cap: $13.13 billion
Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.
Why Do We Think BEN Will Underperform?
- Sales trends were unexciting over the last two years as its 4.5% annual growth was below the typical financials company
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.5% annually while its revenue grew
- ROE of 8.3% reflects management’s challenges in identifying attractive investment opportunities
At $25.40 per share, Franklin Resources trades at 9.8x forward P/E. Dive into our free research report to see why there are better opportunities than BEN.
One Stock to Buy:
Super Micro (SMCI)
Market Cap: $19.09 billion
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Is SMCI a Good Business?
- Annual revenue growth of 74.1% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share have massively outperformed its peers over the last five years, increasing by 45.5% annually
- Free cash flow flipped to positive over the last five years, showing the company has crossed a key inflection point
Super Micro’s stock price of $31.91 implies a valuation ratio of 13.1x 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
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI 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%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. 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 (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
