While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.
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 that may struggle.
One Stock to Sell:
Texas Instruments (TXN)
Market Cap: $160.7 billion
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Why Does TXN Worry Us?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.4% annually over the last two years
- Efficiency has decreased over the last five years as its operating margin fell by 13.5 percentage points
- 28.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $176.57 per share, Texas Instruments trades at 30.3x forward P/E. Check out our free in-depth research report to learn more about why TXN doesn’t pass our bar.
Two Stocks to Buy:
ServiceNow (NOW)
Market Cap: $159.6 billion
Built on a single code base that processes over 4 billion workflow transactions daily, ServiceNow (NYSE: NOW) provides a cloud-based platform that helps organizations automate and digitize workflows across departments, from IT and HR to customer service and security.
Why Is NOW a Good Business?
- Current remaining performance obligations (cRPO) have averaged 21.8% growth over the last year, showing it has a pipeline of unfulfilled contracts that will support revenue in the future
- Excellent operating margin of 13.9% highlights the efficiency of its business model, and its rise over the last year was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
ServiceNow is trading at $153.72 per share, or 2.1x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
ADP (ADP)
Market Cap: $104.7 billion
Processing one out of every six paychecks in the United States, ADP (NASDAQ: ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.
Why Will ADP Outperform?
- Solid 7.5% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Strong free cash flow margin of 20.5% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
- Improving returns on capital reflect management’s ability to monetize investments
ADP’s stock price of $258.71 implies a valuation ratio of 23.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
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 5 Growth Stocks for this month. 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 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
