“Too big to fail” is how we would describe the megacap stocks in this article today. While they will likely stand the test of time, it’s not all sunshine and rainbows as their scale can limit their ability to find new sources of growth.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. That said, here are two industry titans that still have big upside potential and one whose existing offerings may be tapped out.
One Mega-Cap Stock to Sell:
JPMorgan Chase (JPM)
Market Cap: $947.4 billion
Tracing its roots back to 1799 when its earliest predecessor was founded by Aaron Burr, JPMorgan Chase (NYSE:JPM) is a leading financial services company offering investment banking, consumer banking, commercial banking, and asset management services globally.
Why Are We Hesitant About JPM?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 7.8% for the last two years
- Weak unit economics are reflected in its net interest margin of 2.5%, one of the worst among bank companies
- Projected 2.2 percentage point efficiency ratio increase over the next year signals its day-to-day expenses will rise
JPMorgan Chase is trading at $356.38 per share, or 2.6x forward P/B. To fully understand why you should be careful with JPM, check out our full research report (it’s free).
Two Mega-Cap Stocks to Buy:
KLA Corporation (KLAC)
Market Cap: $237.2 billion
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why Is KLAC a Good Business?
- Annual revenue growth of 14.4% over the last five years was superb and indicates its market share increased during this cycle
- Excellent operating margin of 40.6% highlights the efficiency of its business model, and its rise over the last five years was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $180.75 per share, KLA Corporation trades at 33.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
GE Aerospace (GE)
Market Cap: $354.7 billion
One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE:GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare.
Why Will GE Outperform?
- Impressive 19.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Share buybacks catapulted its annual earnings per share growth to 35.5%, which outperformed its revenue gains over the last two years
- GE is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
GE Aerospace’s stock price of $341.89 implies a valuation ratio of 41.5x 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 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.