2 S&P 500 Stocks with Exciting Potential and 1 We Turn Down

The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.

Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here are two S&P 500 stocks leading the market forward and one best left off your watchlist.

One Stock to Sell:

Cisco (CSCO)

Market Cap: $278.8 billion

Founded in 1984 by a husband and wife team who wanted computers at Stanford to talk to computers at UC Berkeley, Cisco (NASDAQ:CSCO) designs and sells networking equipment, security solutions, and collaboration tools that help businesses connect their systems and secure their digital operations.

Why Is CSCO Not Exciting?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.2 percentage points
3. Eroding returns on capital suggest its historical profit centers are aging

Cisco is trading at $69.28 per share, or 17.5x forward P/E. Check out our free in-depth research report to learn more about why CSCO doesn’t pass our bar.

Two Stocks to Watch:

Micron (MU)

Market Cap: $139.1 billion

Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.

Why Are We Fans of MU?

1. Annual revenue growth of 36.4% over the last two years was superb and indicates its market share increased during this cycle
2. Market share is on track to rise over the next 12 months as its 39.7% projected revenue growth implies demand will accelerate from its two-year trend
3. Incremental sales over the last five years have been more profitable as its earnings per share increased by 22.8% annually, topping its revenue gains

Micron’s stock price of $123.97 implies a valuation ratio of 12.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Wabtec (WAB)

Market Cap: $33.23 billion

Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE:WAB) provides equipment, systems, and related software for the railway industry.

Why Does WAB Catch Our Eye?

1. Operating margin improvement of 6.4 percentage points over the last five years demonstrates its ability to scale efficiently
2. Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. WAB is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute

At $194.92 per share, Wabtec trades at 27x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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-small-cap company Comfort Systems (+782% 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

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