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3 Mega-Cap Stocks with Competitive Advantages

CRM Cover Image

"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.

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. Keeping that in mind, here are three industry titans that still have big upside potential.

Salesforce (CRM)

Market Cap: $251.2 billion

Launched in 1999 from a rented one-bedroom apartment in San Francisco by Marc Benioff and his three co-founders, Salesforce (NYSE: CRM) is a software-as-a-service platform that helps companies access, manage, and share sales information such as leads.

Why Does CRM Stand Out?

  1. Software platform has product-market fit given the rapid recovery of its customer acquisition costs
  2. Highly efficient business model is illustrated by its impressive 19.3% operating margin, and its rise over the last year was fueled by some leverage on its fixed costs
  3. Robust free cash flow margin of 32.8% gives it many options for capital deployment

Salesforce is trading at $262.59 per share, or 6x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Palantir (PLTR)

Market Cap: $326.1 billion

Started by Peter Thiel after seeing US defence agencies struggle in the aftermath of the 2001 terrorist attacks, Palantir (NYSE: PLTR) offers software as a service platform that helps government agencies and large enterprises use data to make better decisions.

Why Is PLTR a Top Pick?

  1. Billings have averaged 38.6% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
  2. User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
  3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

Palantir’s stock price of $137.48 implies a valuation ratio of 85x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Merck (MRK)

Market Cap: $196.6 billion

With roots dating back to 1891 and a portfolio that includes the blockbuster cancer immunotherapy Keytruda, Merck (NYSE: MRK) develops and sells prescription medicines, vaccines, and animal health products across oncology, infectious diseases, cardiovascular, and other therapeutic areas.

Why Could MRK Be a Winner?

  1. Enormous revenue base of $63.92 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
  2. Free cash flow margin increased by 10.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
  3. ROIC punches in at 15.6%, illustrating management’s expertise in identifying profitable investments

At $78.50 per share, Merck trades at 8.6x 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 victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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-small-cap company Exlservice (+354% 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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