2 Mega-Cap Stocks with Promising Prospects and 1 Facing Challenges
"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.
Sound complicated? With StockStory, it doesn’t have to be. Our job is to find you high-quality companies that can win regardless of the conditions. Keeping that in mind, here are two industry titans that still have big upside potential and one that could be stalling.
One Mega-Cap Stock to Sell:
PepsiCo (PEP)
Market Cap: $200.6 billion
With a history that goes back more than a century, PepsiCo (NASDAQ:PEP) is a household name in food and beverages today and best known for its flagship soda.
Why Do We Think Twice About PEP?
- Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Anticipated sales growth of 3.8% for the next year implies demand will be shaky
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 2.4 percentage points
At $145.06 per share, PepsiCo trades at 17.2x forward P/E. Check out our free in-depth research report to learn more about why PEP doesn’t pass our bar.
Two Mega-Cap Stocks to Watch:
Abbott Laboratories (ABT)
Market Cap: $217.5 billion
With roots dating back to 1888 when founder Dr. Wallace Abbott began producing precise, dosage-form medications, Abbott Laboratories (NYSE:ABT) develops and sells a diverse range of healthcare products including medical devices, diagnostics, nutrition products, and branded generic pharmaceuticals.
Why Do We Like ABT?
- Economies of scale in a highly regulated sector make the company difficult to replace, giving it meaningful negotiating power
- Share repurchases over the last five years enabled its annual earnings per share growth of 9.6% to outpace its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Abbott Laboratories’s stock price of $124.96 implies a valuation ratio of 22.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Mastercard (MA)
Market Cap: $489.9 billion
Recognizable by its iconic "Priceless" advertising campaign that has run in over 120 countries, Mastercard (NYSE:MA) operates a global payments network that connects consumers, financial institutions, merchants, and businesses, enabling electronic transactions and providing payment solutions.
Why Do We Love MA?
- Annual revenue growth of 15.1% over the last five years was superb and indicates its market share increased during this cycle
- Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Mastercard is trading at $545.40 per share, or 29.5x 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 6 Stocks for this week. 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
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