"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.

These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. Keeping that in mind, here are two industry titans with attractive long-term potential and one whose momentum may slow.

One Mega-Cap Stock to Sell:

Morgan Stanley (MS)

Market Cap: $251.4 billion

Founded in 1924 during the post-WWI economic boom by former JP Morgan partners, Morgan Stanley (NYSE: MS) is a global financial services firm that provides investment banking, wealth management, and investment management services to corporations, governments, institutions, and individuals.

Why Does MS Fall Short?

1. Large asset base makes it harder to grow tangible book value per share quickly, and its annual tangible book value per share growth of 1.7% over the last five years was below our standards for the financials sector

Morgan Stanley is trading at $158.65 per share, or 15.3x forward P/E. If you’re considering MS for your portfolio, see our FREE research report to learn more.

Two Mega-Cap Stocks to Watch:

Microsoft (MSFT)

Market Cap: $3.51 trillion

Originally named "Micro-soft" for microcomputer software when founded in 1975, Microsoft (NASDAQ: MSFT) is a global technology company that develops software, cloud services, devices, and AI solutions for consumers, businesses, and organizations worldwide.

Why Do We Love MSFT?

1. Microsoft is one of the great brands not just in tech but all of business. It produces mission-critical software and bundles it together, resulting in cream-of-the-crop gross margins.
2. The company's elite unit economics lead to robust profit margins that improve over time. This speaks to the scale advantages and operating efficiency across its diverse portfolio, which spans everything from Office and Azure to Minecraft.
3. Microsoft has a virtuous cycle of returns. Its dominant market position enables it to generate strong free cash flow, and it reinvests these funds into promising ventures that further strengthen its competitive moat.

At $473.18 per share, Microsoft trades at 28.7x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.

McDonald's (MCD)

Market Cap: $220.3 billion

With nicknames spanning Mickey D's in the U.S. to Makku in Japan, McDonald’s (NYSE: MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.

Why Should MCD Be on Your Watchlist?

1. Aggressive expansion of new stores reflects an offensive push to quickly grow and sell in markets where it has few or no locations
2. Attractive franchise model leads to wonderful unit economics and a best-in-class gross margin of 57%
3. Robust free cash flow margin of 26.7% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy

McDonald’s stock price of $309.92 implies a valuation ratio of 23.5x forward P/E. Is now the right time to buy? Find out in our full 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 5 Growth Stocks for this month. 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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