Megacap stocks dominate their sectors and their actions influence economies worldwide. The flip side though is that their sheer size means they have less room for explosive growth as scale works against them.

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. That said, here are two industry titans that still have big upside potential and one whose momentum may slow.

One Mega-Cap Stock to Sell:

Home Depot (HD)

Market Cap: $404.9 billion

Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE: HD) is a home improvement retailer that sells everything from tools to building materials to appliances.

Why Is HD Not Exciting?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 33.5% that must be offset through higher volumes
3. 2.4 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position

Home Depot is trading at $406.63 per share, or 25.9x forward P/E. Read our free research report to see why you should think twice about including HD in your portfolio.

Two Mega-Cap Stocks to Watch:

Costco (COST)

Market Cap: $406.4 billion

Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ: COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.

Why Is COST a Good Business?

1. Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 5.6% over the past two years
2. Unparalleled revenue scale of $275.2 billion offsets its poor gross margin and gives it advantageous pricing and terms with suppliers
3. Industry-leading 34.8% return on capital demonstrates management’s skill in finding high-return investments

Costco’s stock price of $916.20 implies a valuation ratio of 46x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

Goldman Sachs (GS)

Market Cap: $254.5 billion

Founded in 1869 as a small commercial paper business in New York City, Goldman Sachs (NYSE: GS) is a global financial institution that provides investment banking, securities, asset management, and consumer banking services to corporations, governments, and individuals.

Why Are We Fans of GS?

1. Products and services resonate with customers, evidenced by its respectable 10.9% annualized sales growth over the last two years
2. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 39.5% exceeded its revenue gains over the last two years
3. Management team has demonstrated it can invest in profitable ventures through its 13% five-year return on equity

At $804 per share, Goldman Sachs trades at 16.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Strong Momentum 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-micro-cap company Tecnoglass (+1,754% 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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