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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here are two S&P 500 stocks positioned to outperform and one that could be in trouble.
One stock to sell:
GoDaddy (GDDY)
Market cap: $14.14 billion
Known for its memorable Super Bowl commercials that put it on the map, GoDaddy (NYSE: GDDY) is a domain registrar and web services provider that helps entrepreneurs establish an online presence through domain registration, website building, hosting, and e-commerce tools.
Why Do We Pass on GDDY?
- Bookings growth averaged a weak 4.8% over the last year, suggesting it may need to tweak its product roadmap or go-to-market strategy
- Estimated sales growth of 5.1% for the next 12 months implies demand will slow from its two-year trend
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 63.7%
At $118.50 per share, GoDaddy trades at 2.7x forward price-to-sales. To fully understand why you should be careful with GDDY, check out our full research report (it’s free).
Two stocks to watch:
Applied Materials (AMAT)
Market cap: $297.2 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 Does AMAT Stand Out?
- Demand will likely accelerate over the next 12 months as its forecasted revenue growth of 45% is above its two-year trend
- Healthy operating margin of 29.9% shows it’s a well-run company with efficient processes
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Applied Materials’s stock price of $379 implies a valuation ratio of 22.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
NetApp (NTAP)
Market cap: $36.39 billion
Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ: NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.
Why Will NTAP Outperform?
- Average billings growth of 10.4% over the past two years enhances its liquidity and shows there is steady demand for its products
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Robust free cash flow margin of 20.6% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
NetApp is trading at $184.56 per share, or 20x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-quality stocks for all market conditions
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.
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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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
