The Nasdaq 100 (^NDX) is known for housing some of the most innovative and fastest-growing companies in the market. But not every stock in the index is a winner - some are struggling with slowing growth, increasing competition, or unsustainable valuations.
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. That said, here are two Nasdaq 100 stocks that could lead the market and one best left off your watchlist.
One stock to sell:
Gilead Sciences (GILD)
Market cap: $211.3 billion
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ:GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Are We Hesitant About GILD?
- 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 2.4% for the last five years
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 30.2 percentage points
- Earnings per share have contracted by 15.3% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
At $171.45 per share, Gilead Sciences trades at 20.8x forward P/E. If you’re considering GILD for your portfolio, see our FREE research report to learn more.
Two stocks to buy:
Microsoft (MSFT)
Market cap: $3.77 trillion
Originally named "Micro-soft" for microcomputer software when founded in 1975, Microsoft (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices, and AI solutions for consumers, businesses, and organizations worldwide.
Why Do We Love MSFT?
- Microsoft is one of the great brands not just in tech but all of business. It produces mission-critical software and bundles it together, resulting in cream-of-the-crop gross margins.
- The company’s elite unit economics lead to robust profit margins that improve over time. This speaks to the scale advantages and operating efficiency across its diverse portfolio, which spans everything from Office and Azure to Minecraft.
- Microsoft has a virtuous cycle of returns. Its dominant market position enables it to generate strong free cash flow, and it reinvests these funds into promising ventures that further strengthen its competitive moat.
Microsoft’s stock price of $508.52 implies a valuation ratio of 25.3x forward price-to-earnings. Is now the right time to buy? Find out in our full research report, it’s free.
Rocket Lab (RKLB)
Market cap: $31.16 billion
Becoming the first private company in the Southern Hemisphere to reach space, Rocket Lab (NASDAQ:RKLB) offers rockets designed for launching small satellites.
Why Will RKLB Beat the Market?
- Impressive 53.4% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Cash burn has become less severe over the last five years, showing the company is making some progress toward financial sustainability
- Improving returns on capital suggest its past investments are beginning to deliver value
Rocket Lab is trading at $52.32 per share, or 3,204.3x forward P/E. Is now the time to initiate a position? See for yourself 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.