While the Nasdaq 100 (^NDX) is filled with cutting-edge technology and consumer companies, not all are on solid footing. Some are dealing with declining demand, high costs, or regulatory pressures that could limit future upside.

Investing in Nasdaq 100 stocks isn’t just about picking big names - it’s about finding the right ones, and that’s where StockStory comes in. That said, here are two Nasdaq 100 stocks that have huge potential and one best left off your watchlist.

One Stock to Sell:

Tesla (TSLA)

Market Cap: $1.36 trillion

Originally founded by Martin Eberhard and Marc Tarpenning in 2003, Tesla (NASDAQ: TSLA) is an electric vehicle company accelerating the world’s transition to sustainable energy.

Why Do We Steer Clear of TSLA?

1. Tesla's scale advantage in EV production leads to gross margins that exceed incumbents such as General Motors and Ford. However, a softer macroeconomic backdrop and tariff pressures have weighed on automobile sales, which are highly cyclical.
2. The company's execution ability is a question mark given its long history of delays, such as the Cybertruck and Robotaxi launches. Its sizeable investments in projects with uncertain return timelines, like Optimus, also raise skepticism from investors.
3. On the bright side, Tesla's Megapack product solves a critical problem for utilities needing renewable energy storage solutions. This innovation has made the energy segment the most profitable and fastest-growing business line for the company.

At $410.80 per share, Tesla trades at 195x forward price-to-earnings. Check out our free in-depth research report to learn more about why TSLA doesn’t pass our bar.

Two Stocks to Buy:

KLA Corporation (KLAC)

Market Cap: $130.5 billion

Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.

Why Are We Bullish on KLAC?

1. Annual revenue growth of 15.9% over the last five years was superb and indicates its market share increased during this cycle
2. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 37%, and its profits increased over the last five years as it scaled
3. Robust free cash flow margin of 30.9% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety

KLA Corporation’s stock price of $987.07 implies a valuation ratio of 29.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Lam Research (LRCX)

Market Cap: $150.9 billion

Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.

Why Will LRCX Beat the Market?

1. Impressive 12.9% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Excellent operating margin of 30.5% highlights the efficiency of its business model, and its rise over the last five years was fueled by some leverage on its fixed costs
3. Industry-leading 64.1% return on capital demonstrates management’s skill in finding high-return investments

Lam Research is trading at $119.70 per share, or 29.5x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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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