The 3 Best Performing Dow Jones Stocks in 2024

The Dow Jones Industrial Average ($DOWI), or “The Dow”, remains one of the oldest major indexes in the United States, with its origins dating back to the 19th century. The price-weighted index is a key indicator of investor sentiment, giving an idea of ​​how optimistic or pessimistic they are.

The 30-stock index, made up of heavyweight names from sectors as diverse as technology, financials and healthcare, has gained about 15% since the start of the year. Three components of the index showed clear outperformance, and analysts expect this strong performance to continue into the new year as well.

Nvidia

We begin our list of Dow outperformers with Nvidia (NVDA), the poster child for AI. Founded in 1993, Nvidia is a leader in specialized semiconductors for AI. The company designs and sells graphics processing units (GPUs) for the gaming and professional markets, as well as systems on a chip (SoCs) for the mobile computing market. The company currently holds a gargantuan market cap of $3.4 trillion.

NVDA stock continues to hit new highs, climbing 175% on a year-to-date basis. As Nvidia has become a key player in the chip industry, its revenue and profits have also skyrocketed. Over the past 10 years, the company has recorded compound annual growth rates (CAGR) in revenue and earnings of 37.84% and 59.72%, respectively.

Nvidia continued its momentum by announcing record quarterly revenues in the third quarter of 2024. Revenues were $35.1 billion, beating estimates of $33.2 billion, and earnings per share were 0.81 $ exceeded estimates by $0.75. Net cash flow from operating activities reached $17.6 billion, up from $7.3 billion a year earlier. Overall, Nvidia ended the quarter with a cash balance of $38.5 billion, with no short-term debt on its books.

Meanwhile, Nvidia stock remains well positioned for growth, supported by innovations such as the Blackwell platform, unveiled in March 2024. Promising up to 25x profitability in training AI models and reduced power consumption compared to the Hopper architecture, Blackwell production is already underway, with availability planned for 2025. Nvidia is also preparing the next leap with Rubin, expected in 2025 or 2026. Its CUDA platform, InfiniBand networking and integrated software tools such as Nvidia AI and Omniverse improve hardware performance and promote customer loyalty, strengthening its competitive advantage.

Nvidia continues to dominate the GPU market, maintaining a market share above 80%, far outpacing competitors Intel (INTC) and Advanced Micro Devices (AMD). In addition, its Omniverse platform opens new sources of revenue across all sectors by optimizing 3D projects and enabling the creation of virtual worlds. Thanks to its integration of generative AI and the OpenUSD framework, the platform enables more complex and realistic simulations, promoting industrial digitalization.

Looking ahead, management remains optimistic about sustained growth through 2025 and beyond, fueled by the shift to accelerated computing, the rise of generative AI applications, and strong enterprise Internet demand and consumers. Nvidia’s chips, essential to data centers, edge computing, automotive technology, cryptocurrency mining and professional applications, position the company as a key player in emerging technologies.

Analysts have given an overall rating of “Strong Buy” to the stock with an average price target of $175.55, which denotes ~25.5% upside potential from current levels. Out of 43 analysts covering the stock, 36 have a “Strong Buy” rating, 3 have a “Moderate Buy” rating, and 4 have a “Hold” rating.

Walmart

Founded by the legendary Sam Walton in 1962, Walmart (WMT) operates a chain of hypermarkets, discount department stores and grocery stores. It serves customers worldwide with more than 10,500 stores in over 20 countries, operating under various banners such as Walmart, Sam’s Club and Asda. Additionally, Walmart enjoys a strong online presence, contributing significantly to its revenue through online sales. The retail giant currently has a market capitalization of approximately $744.5 billion.

WMT stock has reached new highs this year, up 74.8% year to date. Additionally, the best-performing stock is a “dividend king”, although its share price outperformance means WMT now offers a relatively modest dividend yield of just 0.91%.

Over the years, Walmart has seen consistent performance. Over the past five years, WMT has generated revenue and earnings CAGR of 3.37% and 2.36%, respectively. Additionally, analysts expect Walmart to report forecast revenue and earnings growth rates of 5.22% and 24.22%.

Walmart reported blockbuster numbers for the third quarter of fiscal 2025, with revenue and profit beating estimates. Total revenues of $169.6 billion increased 5.5% from the previous year as a new revenue stream in the form of advertising grew 28% annually, while a comparable increase in sales of 5.3%, an increase in average ticket size and traffic growth also contributed. . Earnings rose 13.7% to $0.58 per share, beating the consensus estimate of $0.53 per share. This is the 10th consecutive quarterly profit beaten by WMT.

Walmart also raised its forecast for 2025. The company now expects net sales to grow 4.8% to 5.1% (from 3.75% to 4.75% earlier) and earnings are between $2.42 and $2.47 per share (compared to $2.35 to $2.43 per share earlier). .

Walmart is also laying the foundation for its next phase of growth by focusing on digital transformation, e-commerce, advertising and the expansion of its third-party marketplace. These strategic initiatives have propelled Walmart to become the second largest e-commerce platform in the United States by market share. In the grocery segment, Walmart dominates with nearly 27% market share, well ahead of Amazon’s (AMZN) 18.5%.

Finally, Walmart is actively leveraging artificial intelligence (AI) and automation to improve operational efficiency and reduce costs. Recently, the company projected that by the end of the year, about 3,000 of its 4,600 stores will incorporate some level of automation. This advancement is expected to streamline the distribution network and significantly reduce operating expenses.

As such, WMT stock enjoys an overall “strong buy” rating from analysts, with an average target price of $99.02, representing an upside of 6.7% from the current price. Out of 36 analysts covering the stock, 29 have a “Strong Buy” rating, 4 have a “Moderate Buy” rating, and 3 have a “Hold” rating.

American Express

American Express (AXP) is third on the Dow Jones Outperformer List in 2024. Originally founded in 1850 as a carrier of goods and valuables, it is now a globally integrated payments company , offering products and services, including credit and charge cards, expense management, and travel-related services for consumers and businesses. The company is currently valued at a market capitalization of $213.8 billion.

The company is a favorite of legendary investor Warren Buffett and is up 60% year to date while offering a dividend yield of 0.93%.

American Express has seen consistent revenue and profit growth over the years, with CAGRs of 6.44% and 5.58%, respectively, over the past 10 years.

At the same time, the most recent quarter’s results were marked by year-over-year revenue and profit growth, with the latter also beating Street estimates. Total revenue for the quarter was $16.6 billion, representing growth of 8% from the previous year. Earnings per share (EPS) for the quarter were $3.49, up 6% from last year.

Liquidity-wise, the company is in a healthy position with impressive cash reserves of around $48 billion, well above its short-term debt level of around $1.5 billion.

The company’s focus on premium products and effective risk management has enabled it to maintain low charge-off rates and good credit quality, even in a challenging economic environment. Over the past quarter, the company saw higher adoption from more millennial and Gen Z consumers, accompanied by good international growth. Encouragingly, American Express is seeing strong popularity among younger cohorts.

American Express’ focus on the restaurant sector presents another exciting long-term growth opportunity. Despite an expected industry-wide decline in restaurant sales in 2024, the $1 trillion U.S. restaurant and foodservice market offers significant potential. Younger generations plan to dine out more in 2025, allowing American Express to capitalize on this growing market.

Analysts have given AXP an overall rating of “Moderate Buy” with the average target price already exceeded. The high target price of $350 denotes approximately 15.1% upside potential from current levels. Out of 28 analysts covering the stock, 8 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, 15 have a “Hold” rating and 3 have a “Strong Sell” rating.

As of the date of publication, Pathikrit Bose did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. For more information, please see Barchart’s disclosure policy here.