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 are two Nasdaq 100 stocks that have huge potential and one that may face some trouble.
One Stock to Sell:
Warner Bros. Discovery (WBD)
Market Cap: $77.71 billion
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Do We Avoid WBD?
- The company has faced growth challenges as its 5.7% annual revenue increases over the last five years fell short of other consumer discretionary companies
- Poor free cash flow margin of 8.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Rising returns on capital show management is making relatively better investments
Warner Bros. Discovery’s stock price of $30.99 implies a valuation ratio of 167.8x forward P/E. Read our free research report to see why you should think twice about including WBD in your portfolio.
Two Stocks to Watch:
Amazon (AMZN)
Market Cap: $2.71 trillion
Founded by Jeff Bezos after quitting his stock-picking job at D.E. Shaw, Amazon (NASDAQ:AMZN) is the world’s largest online retailer and provider of cloud computing services.
Why Are We Fans of AMZN?
- Amazon revolutionized the way consumers shop. This isn’t the only tailwind to its impressive revenue growth, as its highly profitable AWS segment has also driven top-line momentum.
- The company’s best-in-class revenue growth coupled with modest operating leverage on its past infrastructure investments has led to elite EPS growth over a multi-year period.
- Though dominant, Amazon’s capital-intensive e-commerce business means its profitability is structurally lower than its pure-play tech peers. Can the company pull it up, or are we reaching a ceiling?
Amazon is trading at $251.86 per share, or 27.7x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Amgen (AMGN)
Market Cap: $217.9 billion
Founded in 1980 during the early days of the biotechnology revolution, Amgen (NASDAQ:AMGN) is a biotechnology company that discovers, develops, and manufactures innovative medicines to treat serious illnesses like cancer, osteoporosis, and autoimmune diseases.
Why Could AMGN Be a Winner?
- Economies of scale give it some operating leverage when demand rises
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $401.50 per share, Amgen trades at 17.2x 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.