1 S&P 500 Stock with Solid Fundamentals and 2 We Turn Down

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.

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 is one S&P 500 stock that could deliver good returns and two that may struggle.

Two Stocks to Sell:

Qualcomm (QCOM)

Market Cap: $146.2 billion

Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ:QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.

Why Is QCOM Not Exciting?

1. Projected sales decline of 4.7% for the next 12 months points to a tough demand environment ahead

At $137.16 per share, Qualcomm trades at 13.2x forward P/E. If you’re considering QCOM for your portfolio, see our FREE research report to learn more.

Cadence Design Systems (CDNS)

Market Cap: $82.78 billion

Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ:CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.

Why Are We Wary of CDNS?

1. Products, pricing, or go-to-market strategy may need some adjustments as its 14.8% average billings growth over the last year was weak
2. Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
3. Free cash flow margin is forecasted to shrink by 1.8 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors

Cadence Design Systems’s stock price of $302.17 implies a valuation ratio of 13.8x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CDNS.

One Stock to Watch:

Stryker (SYK)

Market Cap: $141.8 billion

With over 150 million patients impacted annually through its innovative healthcare technologies, Stryker (NYSE:SYK) develops and manufactures advanced medical devices and equipment across orthopedics, surgical tools, neurotechnology, and patient care solutions.

Why Are We Fans of SYK?

1. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 10.2% over the past two years
2. $25.12 billion in revenue gives its scale, which leads to bargaining power with customers because there are few trusted alternatives
3. Incremental sales over the last five years have been more profitable as its earnings per share increased by 12.9% annually, topping its revenue gains

Stryker is trading at $370.51 per share, or 25.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% 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.