1 S&P 500 Stock to Target This Week and 2 We Avoid

The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.

Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here is one S&P 500 stock that is leading the market forward and two that may struggle.

Two Stocks to Sell:

General Dynamics (GD)

Market Cap: $87.41 billion

Creator of the famous M1 Abrahms tank, General Dynamics (NYSE:GD) develops aerospace, marine systems, combat systems, and information technology products.

Why Are We Wary of GD?

1. Sales pipeline suggests its future revenue growth may not meet our standards as its average backlog growth of 2.1% for the past two years was weak
2. Estimated sales growth of 3.5% for the next 12 months implies demand will slow from its two-year trend
3. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 5.8% annually

General Dynamics’s stock price of $327.53 implies a valuation ratio of 21x forward P/E. To fully understand why you should be careful with GD, check out our full research report (it’s free).

Thermo Fisher (TMO)

Market Cap: $184.3 billion

With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE:TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.

Why Are We Cautious About TMO?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 10.2 percentage points
3. Waning returns on capital imply its previous profit engines are losing steam

Thermo Fisher is trading at $487.50 per share, or 20.9x forward P/E. Read our free research report to see why you should think twice about including TMO in your portfolio.

One Stock to Buy:

Palantir Technologies (PLTR)

Market Cap: $371.8 billion

Named after the all-seeing stones in "Lord of the Rings," Palantir Technologies (NASDAQ:PLTR) develops software platforms that help government agencies and enterprises integrate, analyze, and operationalize their data for decision-making.

Why Is PLTR a Good Business?

1. Average billings growth of 44.2% over the last year enhances its liquidity and shows there is steady demand for its products
2. Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
3. PLTR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $154.73 per share, Palantir Technologies trades at 82.1x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full 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 9 Market-Beating Stocks. 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 Kadant (+351% 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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