2 Mega-Cap Stocks with Exciting Potential and 1 We Ignore

Megacap stocks are behemoths that set the tone for their industries, and their massive scale typically leads to wide moats. However, the downside is that most have already exploited their existing market opportunities and must invest heavily to expand further, a risky proposition.

This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. Keeping that in mind, here are two industry titans whose competitive advantages create flywheel effects and one that could be stalling.

One Mega-Cap Stock to Sell:

AbbVie (ABBV)

Market Cap: $395.9 billion

Born from a 2013 spinoff of Abbott Laboratories' pharmaceutical business, AbbVie (NYSE:ABBV) is a biopharmaceutical company that develops and markets medications for autoimmune diseases, cancer, neurological disorders, and other complex health conditions.

Why Are We Hesitant About ABBV?

1. Constant currency revenue growth has disappointed over the past two years and shows demand was soft
2. Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 11.4 percentage points
3. Earnings per share were flat over the last five years while its revenue grew, showing its incremental sales were less profitable

AbbVie’s stock price of $223.57 implies a valuation ratio of 16.4x forward P/E. Read our free research report to see why you should think twice about including ABBV in your portfolio.

Two Mega-Cap Stocks to Buy:

Nvidia (NVDA)

Market Cap: $4.40 trillion

Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ:NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.

Why Will NVDA Beat the Market?

1. Annual revenue growth of 104% over the last two years was superb and indicates its market share increased during this cycle
2. Share buybacks catapulted its annual earnings per share growth to 79.1%, which outperformed its revenue gains over the last five years
3. Strong free cash flow margin of 44.6% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute

Nvidia is trading at $179.82 per share, or 26.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Merck (MRK)

Market Cap: $245.7 billion

With roots dating back to 1891 and a portfolio that includes the blockbuster cancer immunotherapy Keytruda, Merck (NYSE:MRK) develops and sells prescription medicines, vaccines, and animal health products across oncology, infectious diseases, cardiovascular, and other therapeutic areas.

Why Should You Buy MRK?

1. Enormous revenue base of $64.23 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
2. Adjusted operating margin improvement of 21 percentage points over the last two years demonstrates its ability to scale efficiently
3. Free cash flow margin jumped by 5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $99.46 per share, Merck trades at 11.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.

Stocks We Like Even More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as ServiceNow (+163% between June 2020 and June 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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