“Too big to fail” is how we would describe the megacap stocks in this article today. While they will likely stand the test of time, it’s not all sunshine and rainbows as their scale can limit their ability to find new sources of growth.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. Keeping that in mind, here is one industry titan with attractive long-term potential and two whose existing offerings may be tapped out.
Two Mega-Cap Stocks to Sell:
Intel (INTC)
Market Cap: $503.4 billion
Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is a leading manufacturer of computer processors and graphics chips.
Why Do We Steer Clear of INTC?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.9% annually over the last five years
- Performance over the past five years was negatively impacted by new share issuances as its earnings per share dropped by 27.1% annually, worse than its revenue
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
Intel’s stock price of $100.21 implies a valuation ratio of 60.5x forward P/E. To fully understand why you should be careful with INTC, check out our full research report (it’s free).
Bank of America (BAC)
Market Cap: $440.5 billion
Tracing its roots back to 1784 and now serving approximately 67 million consumer and small business clients, Bank of America (NYSE: BAC) is a global financial institution that provides banking, investing, asset management, and risk management products and services to individuals, businesses, and governments.
Why Does BAC Give Us Pause?
- Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 9% over the last five years was below our standards for the banking sector
- Weak unit economics are reflected in its net interest margin of 2%, one of the worst among bank companies
- Capital generation will likely be soft over the next 12 months as Wall Street’s estimates imply tepid tangible book value per share growth of 7.4%
Bank of America is trading at $63.05 per share, or 1.6x forward P/B. If you’re considering BAC for your portfolio, see our FREE research report to learn more.
One Mega-Cap Stock to Buy:
Philip Morris (PM)
Market Cap: $293.1 billion
Founded in 1847, Philip Morris International (NYSE: PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.
Why Will PM Outperform?
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 67%
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 37%, and its profits increased over the last year as it scaled
- PM is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $188.12 per share, Philip Morris trades at 21.7x 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
