The Nasdaq 100 (^NDX) is home to some of the biggest success stories in tech and growth investing. However, certain stocks in the index face challenges like profitability concerns, rising costs, or shifts in market trends.
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. Keeping that in mind, here are two Nasdaq 100 stocks driving the future of tech and one that may face some trouble.
One Stock to Sell:
CoStar (CSGP)
Market Cap: $28.82 billion
With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ: CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.
Why Does CSGP Worry Us?
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.8% annually
- 17.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $68.02 per share, CoStar trades at 56.5x forward P/E. Check out our free in-depth research report to learn more about why CSGP doesn’t pass our bar.
Two Stocks to Buy:
Datadog (DDOG)
Market Cap: $53.1 billion
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Is DDOG a Good Business?
- Ability to secure long-term commitments with customers is evident in its 26.5% ARR growth over the last year
- Estimated revenue growth of 21.7% for the next 12 months implies its momentum over the last two years will continue
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
Datadog’s stock price of $151.48 implies a valuation ratio of 14.2x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Broadcom (AVGO)
Market Cap: $1.84 trillion
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ: AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Why Should You Buy AVGO?
- Impressive 30% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Offerings are difficult to replicate at scale and result in a best-in-class gross margin of 76.1%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Broadcom is trading at $392.96 per share, or 45.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged 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-small-cap company Comfort Systems (+782% 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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