Nasdaq 100 Stocks to Watch and Avoid in 2026
The Nasdaq 100 is known for its high-growth tech and innovative companies, but not every stock in the index is a safe bet. Investors need to carefully evaluate which stocks have strong potential and which may face challenges. In a recent analysis, StockStory highlighted two promising Nasdaq 100 stocks and one that may be worth avoiding.
Warner Bros. Discovery (WBD) is identified as a stock to sell. With a market cap of $77.71 billion, the company has struggled with modest revenue growth of 5.7% annually over the last five years. Its free cash flow margin stands at a concerning 8.4% for the last two years, limiting its ability to invest in growth or return value to shareholders. Despite improving returns on capital, Warner Bros. Discovery’s stock price of $30.99 translates to a high forward P/E ratio of 167.8x, raising questions about its valuation.
On the other hand, Amazon (AMZN) is seen as a strong contender. As the world’s largest online retailer and cloud computing provider, Amazon has a market cap of $2.71 trillion. The company’s AWS segment has been a major driver of revenue growth, and its past investments have led to impressive earnings per share growth. Trading at $251.86 per share with a forward P/E of 27.7x, Amazon presents an intriguing opportunity for investors.
Amgen (AMGN), a biotechnology company with a market cap of $217.9 billion, is another stock to watch. Known for its innovative medicines, Amgen benefits from economies of scale and strong free cash flow profitability. The company’s returns on capital demonstrate effective management, and its stock price of $401.50 reflects a forward P/E of 17.2x. Investors may find Amgen an attractive option for long-term growth.