1 S&P 500 Share Ideal for Long-Term Holders and 2 Overcoming Obstacles

Examining S&P 500 Stocks: Leaders and Laggards

The S&P 500 index features some of the largest and most recognized companies, making it a popular choice for investors who value stability. However, not every large-cap stock offers the same potential—some face challenges such as slowing growth, shrinking profit margins, or intensifying competition.

Even among blue-chip stocks, performance can vary greatly. To help you make informed decisions, we use StockStory to analyze the market landscape. Below, we highlight one S&P 500 company that stands out for its strong performance, as well as two that may be facing headwinds.

Two Stocks to Consider Selling

PepsiCo (PEP)

Market Capitalization: $219.7 billion

PepsiCo (NASDAQ:PEP), a staple in the food and beverage industry for over a hundred years, is best known for its iconic soft drink and a broad portfolio of popular products.

Why We’re Cautious About PepsiCo:

• Product sales volumes have declined for two consecutive years, forcing the company to depend on price hikes to maintain revenue.
• Analysts expect muted demand in the coming year, with projected growth of just 4.8%.
• Operational efficiency has slipped, as evidenced by a 1.8 percentage point drop in operating margin over the past year.

Currently, PepsiCo trades at $161.31 per share, with a forward price-to-earnings ratio of 18.7.

Franklin Resources (BEN)

Market Capitalization: $13.13 billion

Franklin Resources (NYSE:BEN), operating under the Franklin Templeton brand since 1947, is a global asset management firm serving individuals, institutions, and financial advisors worldwide.

Reasons for Our Pessimism on Franklin Resources:

• Revenue growth has been lackluster, with an annual increase of just 4.5% over the past two years—trailing the industry average.
• Despite rising sales over the last five years, profitability has declined, with earnings per share dropping by 2.5% annually.
• A return on equity of 8.3% suggests the company has struggled to find high-return investment opportunities.

Franklin Resources is priced at $25.40 per share, equating to a forward P/E of 9.8.

One Stock to Consider Buying

Super Micro Computer (SMCI)

Market Capitalization: $19.09 billion

Founded in 1993 in Silicon Valley, Super Micro Computer (NASDAQ:SMCI) is recognized for its modular, "building block" approach to server design. The company specializes in developing high-performance, energy-efficient server and storage solutions for data centers, cloud computing, artificial intelligence, and edge computing.

What Makes Super Micro Stand Out?

• Revenue has surged by 74.1% annually over the past two years, signaling significant market share gains.
• Over the last five years, earnings per share have soared by 45.5% per year, far outpacing industry peers.
• The company has achieved positive free cash flow in the past five years, marking a major financial milestone.

Super Micro is currently valued at $31.91 per share, with a forward P/E ratio of 13.1. Is this the right moment to invest?

Additional Stock Picks to Watch

Bonus: This Week’s Top 6 Stock Picks
The current market environment is quickly distinguishing high-quality stocks from overvalued ones, with AI-driven shifts impacting entire sectors. In such a dynamic market, it’s crucial to have more than just a list of promising companies.

Our AI-powered system identified Palantir before its 1,662% surge, AppLovin ahead of its 753% rally, and Nvidia prior to its 1,178% climb. Every week, it highlights six new stocks that meet our rigorous criteria.

Past selections from 2020 include now well-known names like Nvidia (up 1,326% from June 2020 to June 2025) and lesser-known companies such as Exlservice, which delivered a 354% five-year return.