StockStory has picked one S&P 500 stock to buy and two to sell, saying not every company in the index is a winner. Monster Beverage is the buy. The energy drink maker, with a market cap of $92.66 billion, has a 28.6% operating margin and a 35.4% return on capital. Its shares trade at $47.46, or 37.9x forward earnings. Twilio is a sell. The $38.95 billion communications platform grew revenue 14.7% a year over two years, slower than software peers, and its gross margin is 48.6%. Shares trade at $254.75, or 6.7x forward sales. Baxter is also a sell. The $13.26 billion healthcare products maker saw earnings per share fall 8.5% a year over five years and posts negative returns on capital. Shares trade at $25.45, or 11.9x forward earnings.

Twilio's stock has surged 167% over the past year, significantly outpacing the S&P 500's 18% gain. The cloud communications provider now trades at 39.7 times operating cash flow, compared to 14.5 times for the broader market. The company raised its 2026 organic revenue growth forecast to 13% to 13.5% in August, up from 9.5% to 10.5% previously, citing strong AI customer demand. Second-quarter organic revenue grew 17% year-over-year. However, management expects third-quarter organic growth to slow to 11% to 12%. The company also warned of tougher comparisons ahead in Voice and software add-ons. Twilio's upcoming third-quarter results will test whether the premium valuation is justified, as investors are betting on continued acceleration despite increasingly difficult year-over-year comparisons.

Salesforce and Twilio are pursuing different strategies to capitalise on growing demand for AI-powered customer engagement. Salesforce is expanding beyond traditional CRM with Customer 360, Data 360, Slack, and Agentforce. Twilio focuses on communications infrastructure connecting businesses, customers, and AI agents. Salesforce reported encouraging AI metrics in its second quarter of fiscal 2027. Agentforce annual recurring revenues surpassed $1.5 billion, jumping over 240% year over year. Combined AI and Data ARR, including Agentforce, Data 360, and Informatica Cloud, increased 210% to $3.9 billion. However, overall revenue growth remains slower. Second-quarter fiscal 2027 revenues increased 11% to $11.3 billion. The company reported 102.7% growth in non-GAAP earnings per share to $5.90, though this benefited from gains on strategic investments, including its stake in Anthropic.