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. Keeping that in mind, here is one Nasdaq 100 stock that has huge potential and two best left off your watchlist.
Two Stocks to Sell:
Walmart (WMT)
Market Cap: $946.1 billion
Known for its large-format Supercenters, Walmart (NASDAQ:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Are We Cautious About WMT?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.3% over the last three years was below our standards for the consumer retail sector
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 24.9%
- Subpar operating margin of 4.2% constrains its ability to invest in process improvements or effectively respond to new competitive threats
At $118.42 per share, Walmart trades at 39.5x forward P/E. Check out our free in-depth research report to learn more about why WMT doesn’t pass our bar.
Tesla (TSLA)
Market Cap: $1.47 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 Do We Avoid TSLA?
- 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’s stock price of $391.30 implies a valuation ratio of 193.9x forward price-to-earnings. If you’re considering TSLA for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Zscaler (ZS)
Market Cap: $21.15 billion
Pioneering the "zero trust" approach that has fundamentally changed enterprise network security, Zscaler (NASDAQ:ZS) provides a cloud-based security platform that connects users, devices, and applications securely without traditional network-based security hardware.
Why Are We Bullish on ZS?
- Customers view its software as mission-critical to their operations as its ARR has averaged 24.4% growth over the last year
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- ZS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Zscaler is trading at $129.55 per share, or 5.8x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.