Three Dow stocks are anticipated to surge significantly in 2025 and beyond.
This year has been a triumph for stocks, with indexes confirming a bull market and reaching multiple record highs. The Dow Jones Industrial Average, consisting of 30 prominent large-cap stocks that drive today's economy, surpassed 40,000 for the first time and is looking at a gain of around 16% since the beginning of the year.
The upswing might not be slowing down anytime soon. History indicates that bull markets generally outlast bear markets by a significant margin - approximately nine years compared to less than two years, according to First Trust data. This suggests that stocks could possibly continue to climb. Let's explore three Dow stocks that have flourished this year and are anticipated to skyrocket in 2025 and beyond.
1. Amazon
Amazon (AMZN 1.32%) dominates the e-commerce world, now boasting over 200 million members in its Prime subscription service. Countless others shop on Amazon without a Prime membership.
The company has seen its stock surge over 35% this year due to double-digit quarterly revenue growth and its investment in artificial intelligence (AI), which paved the way for improvements in efficiency - such as optimizing delivery routes. These small enhancements collectively help reduce Amazon's costs.
Amazon also reaped benefits from the improvements it made to its cost structure a couple of years ago and will likely continue to see a positive impact. Moreover, a lower-interest-rate environment, following the Federal Reserve's two rounds of cuts, should gradually enhance consumers' buying power, leading to increased spending on discretionary items as well as essentials purchased on Amazon.
All of these factors should contribute to Amazon's shares continuing their upward trajectory.
2. Apple
Apple's (AAPL 0.61%) strong moat has allowed its iPhone and other devices to maintain their leading position. Last year, the iPhone claimed the top spot worldwide in the smartphone market, with an all-time high market share, as per International Data Corp. Apple's strong brand keeps users loyal and eager for the next iteration of their beloved smartphone.
This is fueling Apple's growth in yet another segment - services. With over 2.2 billion active devices in circulation, users can subscribe to various services, from digital content to cloud storage. This trend is gaining momentum, and Apple has reported record services revenue repeatedly.
As Apple integrates AI into its devices, its users will experience an even improved system. Apple's tradition of growth and its offering of dividends make it an attractive investment option. With its services and investment in AI, a new wave of growth might be on the horizon. It's evident that Apple stock could witness further growth in the near term and in the long term as well.
3. Nvidia
Nvidia (NVDA 1.14%) has been admitted to the Dow recently, as its strength over the past few years became undeniable. The AI chip pioneer has reported triple-digit earnings growth quarter after quarter, and this trend is likely to persist, thanks to the company's focus on innovation. An annual update to its top-performing chips is on the cards.
Though Nvidia stock has surged 2,700% over the past five years and is on track for a gain of nearly 200% this year, Nvidia remains an astute choice for 2025 and beyond. The $200 billion AI market is projected to reach $1 trillion by the end of the decade, and Nvidia stands to gain from this growth. It holds around 80% of the AI chip market and is readying to launch its latest architecture, Blackwell - the most potent chip it has ever developed. The demand for Nvidia's products is outpacing the supply, underscoring their popularity.
Nvidia shares might not experience a continuous ascent - stocks rarely do - but the launch of Blackwell and the billions of dollars in revenue it should generate may boost the stock in the coming year. The complete Nvidia portfolio, comprising new products and services debuting at a fast pace, could maintain the momentum well into the future.
Given the impressive performance of the stock market this year and the predicted continued growth, it's worth considering investing in companies that have performed well and show potential for future growth. For instance, Amazon's (AMZN) finance sector has seen significant gains due to its e-commerce dominance and strategic cost reduction, making it an attractive investment opportunity. Similarly, Apple's (AAPL) strong moat in the tech sector and its successful integration of AI are expected to drive its stock upward in the short and long term. Lastly, Nvidia (NVDA), a recent addition to the Dow, with its focus on AI innovation and market potential, could be an excellent long-term investment choice.
