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.
Even among high-growth companies, some are struggling, which is why we built StockStory - to help you separate winners from losers. That said, here are two Nasdaq 100 stocks that have huge potential and one that may face some trouble.
One Stock to Sell:
Electronic Arts (EA)
Market Cap: $37.87 billion
Best known for its Madden NFL and FIFA sports franchises, Electronic Arts (NASDAQ: EA) is one of the world’s largest video game publishers.
Why Are We Cautious About EA?
- Muted 2.1% annual revenue growth over the last three years shows its demand lagged behind its consumer internet peers
- Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
- Expenses have increased as a percentage of revenue over the last few years as its EBITDA margin fell by 8.1 percentage points
Electronic Arts’s stock price of $151.50 implies a valuation ratio of 15x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than EA.
Two Stocks to Watch:
Lam Research (LRCX)
Market Cap: $118 billion
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Why Are We Positive On LRCX?
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 29.6%, and its operating leverage amplified its profits over the last five years
- LRCX is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
- Industry-leading 63.1% return on capital demonstrates management’s skill in finding high-return investments
Lam Research is trading at $92.23 per share, or 24.4x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Cintas (CTAS)
Market Cap: $89 billion
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Why Will CTAS Beat the Market?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 8.6% annual sales growth over the last two years
- Robust free cash flow margin of 16.4% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
At $220.20 per share, Cintas trades at 47.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
