In this article, we will take a look at the 12 Best Dow Stocks to Buy Right Now.
The Dow Jones Industrial Average is among the most popular stock market indices globally. Known as the Dow, the index monitors the performance of 30 blue-chip companies listed on the US stock exchanges. In 2024, the Dow index returned over 16%, compared to a 25% return for the broader market.
Historically, the Dow has performed better compared to the broader market. According to S&P Global, in the past 30 years up until June 2021, the Dow index returned approximately 11.16% compared to the market’s return of 10.6%. This growth is mainly due to the Dow’s stable, industry-leading companies that offer reliable dividends and returns.
Read More: 7 Most Undervalued Financial Stocks To Buy According to Analysts.
Since the beginning of 2025, Dow Jones has soared over 4% as mega-cap tech stocks surged following their positive earnings. Whereas, the S&P 500 index has jumped by 3.70% year-to-date, as of January 23.
Trump’s AI startup initiative is already pumping the tech stocks. The $500 billion Stargate AI infrastructure project led by Oracle, OpenAI, and SoftBank will accelerate the AI demand. Tech stocks are already dominating the market driven by the huge demand for AI. Nasdaq Composite returned nearly 30% in 2024, outperforming the Dow and the S&P 500.
The U.S. economy is expected to perform better this year compared to 2024 followed by lower interest rates and PCE inflation expected around 2.1%. Economists anticipate a suitable atmosphere for mergers and acquisitions.
Investing in Dow Jones stocks can be appealing in 2025 as they offer huge dividends and returns. The Dow stocks have strong balance sheets and have a proven track record of high yields.
With that, let’s take a look at the 12 Best Dow Stocks to Buy Right Now.
Francisco Amaral Leitao / shutterstock.com
Our Methodology
We shifted through the Dow Jones Index and selected the 12 best Dow stocks based on hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024. The best Dow stocks are ranked in ascending order of their hedge fund holdings.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best Dow Stocks to Buy Right Now
12. 3M Company (NYSE:MMM)
No. of Hedge Fund Holders: 82
3M Company (NYSE:MMM) is an American multinational conglomerate with a wide range of operations. The company’s segments include Safety and Industrial, Transportation and Electronics, and Consumer. 3M’s commitment to R&D allows it to create unique products that offer pricing power and improve the market share. The diversified sales growth volume adds to 3M’s margin improvement, driving the company’s global reach.
3M Company (NYSE:MMM) kicked off 2024 on a challenging note following the spinning off of its healthcare division and slashing its dividend by 50%. The company’s strategic plan to manage expenses is working as MMM shares gained nearly 63% in 2024.
3M Company ended 2024 on a high note, beating earnings and revenue estimates in the fourth quarter of the year. In Q4 2024, the company posted adjusted earnings per share of $1.68, surpassing estimates by 9.32%, while the FY24 adjusted EPS was $7.30, up by 21% year-over-year. The company’s all business segments posted positive adjusted organic growth in Q4, presenting the first growth in all groups in nine quarters. 3M added $4.9 billion in FCF to the balance sheet with a remarkable 111% conversion rate, indicating strong cash flow management. In addition, the company continues to expand its innovation engine with 169 new products launched in 2024, a 32% increase from a year ago.
3M Company (NYSE:MMM) management expects Q1 2025 sales to be similar to Q4 2024. The company also aims to return a similar cash to shareholders over $3 billion in 2025 compared to $3.8 billion returned in 2024 through dividends and share repurchases. The company’s 2025 share repurchase program will be around $1.5 billion with expectations of strong operating performance and capital deployment to drive earnings growth.
11. The Home Depot, Inc. (NYSE:HD)
No. of Hedge Fund Holders: 82
Home Depot, Inc. (NYSE:HD) is one of the largest home improvement specialty retailers in the world. The company engages in the sale of building materials and home improvement equipment. The company has more than 2,300 stores in the U.S., Canada, and Mexico.
In 2025, real estate experts expect a rise in housing inventory driven by higher demand due to lower interest rates compared to 2024. Over the past year, HD shares registered a modest gain of over 15%. This year with a higher demand expected in the housing market, Home Depot can gain on that momentum. Surprisingly, Hurricanes Helene and Milton have unlocked additional demand for the firm.
The home improvement industry is vast and fragmented, valued at more than $1 trillion annually. Home Depot, Inc. (NYSE:HD) being one of the largest players in the sector, only grasps 15% market share. This reflects Home Depot’s potential to capture a wider market. Moreover, the company’s operating cash flow sits at more than $15 billion, as of Q3 2024, which adds to the company’s ability to invest and expand.
Core inflation has cooled to 3.2% yearly growth, while economists projected 3.3% annual growth. The slowing inflation helps HD because it allows consumers certain relief from higher prices. In 2025, total year-on-year CPI and consumer inflation rates are expected to fall below the Fed’s 2% target, which would be great for HD.
10. Merck & Co., Inc. (NYSE:MRK)
No. of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) is a leading global pharmaceutical company engaged in discovering, developing, and delivering innovative medicines and vaccines for untreated illnesses. The company has been at the forefront of medical advancements, addressing some of the most critical health issues.
Mad Money’s Jim Cramer recently pointed out the significance of Merck & Co., Inc.’s (NYSE:MRK) anti-cancer franchise, Keytruda. In addition, Cramer highlighted that the company’s acquisition of Acceleron in 2021 hasn’t gotten enough credit. Acceleron’s Winrevair is an FDA-approved drug that treats a fatal disease known as pulmonary arterial hypertension. Cramer talked about other medicines that add to Merck’s advantage and market competitiveness. To find more about Cramer’s view on MRK, you can read it here.
Merck & Co., Inc. has had a successful past year, driven by development in pipeline diversification. At the start of 2024, the company projected an additional $35 billion in revenue from its new drug portfolio, which has since increased to $50 billion. This growth was mainly driven by expansion in its clinical trials, with 26 ongoing phase III trials, up from just nine in 2021. Moreover, Merck & Co. is working in collaboration with Gilead Sciences to develop a combination therapy that could revolutionize HIV treatment. The partnership is expected to generate over $5 billion in revenue for MRK.
9. Walmart Inc. (NYSE:WMT)
No. of Hedge Fund Holders: 88
Walmart Inc. (NYSE:WMT) is the largest brick-and-mortar retailer in the world. The company operates in retail, wholesale, e-commerce, and other units worldwide. Walmart runs its operations through three segments: Walmart U.S., Walmart International, and Sam’s Club. The company’s specialty is its low prices, which has kept the stock surging in the high inflation era. In that regard, WMT shares gained over 74% in 2024.
Walmart Inc. (NYSE:WMT) continues to flourish and deliver sales growth. In Q3 FY25, the company posted sales growth of 6.1% year-over-year and a profit increase of 9.8%. Walmart’s e-commerce sales soared over 27%, while its advertising revenue rose by 28% year-over-year, driven by robust growth in digital channels. Membership income increased by 22% compared to Q3 FY24, reflecting strong engagement and value perception among customers.
On the international front, Walmart sales also delivered strong outcomes with a rise of 12.4% from a year ago, driven by high demand in Mexico, India, and China. Economic growth in countries such as India and China is expected to be higher in 2025 compared to the rest of the world, therefore, Walmart’s international sales will deliver another strong FY2026.
The company is effectively leveraging Generative AI to enhance its customer experience and operational efficiency. Walmart’s Generative AI tool, My Assistant, has assisted more than 50,000 associates with over 1.5 million questions since its launch. My Assistant is now available in 13 additional countries as Walmart continues to experience engagement growth.
8. JPMorgan Chase & Co. (NYSE:JPM)
No. of Hedge Fund Holders: 105
JPMorgan Chase & Co. (NYSE:JPM) is an American multinational financial services and investment banking company. JPMorgan manages its operations through three segments including Consumer & Community Banking, Commercial & Investment Bank, and Asset & Wealth Management.
JPMorgan Chase & Co.’s diversified financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management make it an attractive investment option. The company’s overall stability relies on its diversification which allows it to create a balance across different segments.
JPMorgan Chase & Co. (NYSE:JPM) outperformed the broader financial market, rising by more than 54% in 2024. In Q4 2024, the company’s earnings and revenue beat the estimates. The revenue came in at $43.74 billion, up by 13.4% year-over-year, while the EPS was $4.81, beating estimates of $3.89 per share. The increased sales in Q4 were driven by double-digit growth in payment fees, which recorded double-digit growth for the fourth consecutive quarter.
The company continued to expand its customer base across Consumer Banking, Business Banking, Card, and Wealth Management. For instance, Asset and Wealth Management experienced record long-term net inflows of $234 billion, driven by positive growth across all channels, regions, and asset classes. In addition, JPMorgan Chase & Co. registered 2 million net new checking accounts in 2024.
JPM’s capital management also remains robust as the CET1 ratio improved to 15.7%, up 40 basis points quarter-over-quarter. The company remains committed to returning capital to shareholders through dividends, returning $3.5 billion to investors through dividends in Q4 2024.
7. UnitedHealth Group Incorporated (NYSE:UNH)
No. of Hedge Fund Holders: 112
UnitedHealth Group Incorporated (NYSE:UNH) is one of the largest health insurance companies in the world. The company provides a wide range of health insurance-related services to its consumers. Over the past months, UnitedHealth has expanded its services to several new locations. Moreover, the company intends to reduce the cost of healthcare for consumers as part of its Medicare Advantage Plan for 2025.
On January 21, TD Cowen’s analyst Ryan Langston, maintained a Buy rating on UnitedHealth Group Incorporated (NYSE:UNH) and set a price target of $609, presenting an upside of 83% from the current price level. Langston is bullish on UNH and believes that the company’s ability exceeds market expectations and exhibits solid financial results. The analyst pointed out that the health insurer logged a better-than-consensus medical loss ratio, explaining the reason behind its noteworthy guidance for 2025. Langston remains optimistic about UNH’s strategic initiatives and pricing strategies which are anticipated to drive growth in FY2025.
In FY24, the company’s earnings and revenue surpassed estimates. UnitedHealth Group Incorporated posted revenue of $400 billion, an increase of 8% year-over-year. The company’s earnings from operations in 2024 amounted to $32.3 billion. The company’s Optum Health is expected to serve more than 5.4 million value-based care patients in 2025, indicating a growth of 650,000 over 2024.
Vulcan Value Partners stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH), a company that we have owned several times in the past, is the largest health insurer in the United States. UnitedHealth Group also owns Optum, which is a rapidly growing healthcare services company. The environment for the health insurance business remains positive as growth in healthcare spending, driven by chronic diseases and an aging population will continue to outpace overall economic growth. The insurance business benefits from powerful network effects as more members attract more providers and vice versa, which reinforces United’s value proposition and bargaining power with each side of the network. We respect UnitedHealth Group’s management team and have been very pleased with their long-term vision and execution.”
6. Salesforce, Inc. (NYSE:CRM)
No. of Hedge Fund Holders: 116
Salesforce, Inc. (NYSE:CRM) is an American cloud-based CRM company. The company operates the Customer 360 platform which offers sales, service, marketing, commerce, integration, AI, analytics, collaboration, automation, and other services. Lately, the company’s AI-powered platform called Agentforce has gained traction.
On January 17, TD Cowen upgraded CRM to Buy from hold with a price target of $400, up from $380. The analyst believes that the buzz around the company’s AI tool has cooled since its launch and it is a good opportunity to buy the stock. On January 21, Piper Sandler analyst Brent Bracelin reiterated an Overweight rating on CRM shares and set a price target of $405. The firm believes that Agentforce brings a competitive advantage to the company and it could sell more services around the AI hype. However, Bracelin expects CRM’s AI agent tool will take time before it starts generating revenue until fiscal year 2027.
On January 21, during the World Economic Forum in Davos, Switzerland, the company’s CEO Marc Benioff highlighted that they closed 200 deals in Q3 FY2025 and expect to close thousands of Agentforce deals in Q4. Companies already have a lot of their data on Salesforce CRM software, allowing a smooth option to explore Agentforce to access existing information and automate the system. The AI agent holds the potential and could unlock a promising opportunity for Salesforce, Inc. (NYSE:CRM) going ahead.
5. Apple Inc. (NASDAQ:AAPL)
No. of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that designs, manufactures, and markets smartphones, PCs, watches, wearables, and related accessories. Over the past years, the iPhone maker has enhanced its Services business segment with major products including Apple Wallet and Apple Pay, which allows users to manage payments from their Apple systems.
Apple Inc. (NASDAQ:AAPL) has solidified its long-term dominance in the consumer electronics sector while concentrating on a high-end, intricately linked ecosystem of goods, services, and software. Apple’s iPhone which generates 46% of the company’s net sales continues to hold its market. Retaining consumers in this interlinked ecosystem of Apple allows the company to expand its network and maximize its earnings.
In the fourth quarter of 2024, the company reported record revenue of $94.9 billion, a rise of 6% from a year ago. The sales growth was driven by strong iPhone revenue, which accounted for $46.2 billion, setting a record for the September quarter across all geographic areas. Apple’s services sector continues to grow as the firm reported over 1 billion paid memberships in Q4. The services revenue also reached a record high of $25 billion, up 12% year-over-year.
CDT Capital Management stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“The crowd. While this evolution in AI is going to change the world, market expectations for the technology have become unhinged. The crowd, which is more like an exuberant mob, anointed the Mag 7 with spectacular, nonsensical valuations based on the premise that AI will be an amazing, money-printing growth engine for these companies – and the truth is it likely will be. The problem is that the math just isn’t mathing.”
4. Visa Inc. (NYSE:V)
No. of Hedge Fund Holders: 165
Visa Inc. (NYSE:V) is one of the largest global payments technology companies. The company supports global commerce and money movement in more than 200 countries. Visa’s robust payment network and low overhead costs allow the company to generate high profits. According to data from The Nilson Report, Visa had $12.6 trillion in total payment volume and almost 4.5 billion cards in circulation in 2023. To understand this, Visa’s counterpart, Mastercard, processed about 40% less payment volume during that same period.
Visa Inc. (NYSE:V) has been one of the most successful payment networks of the last decade. In the past 10 years, Visa’s profit margin has averaged 48%. Moreover, the company enjoys generating huge cash, bringing in over $18.7 billion FCF over the past 12 months.
The company’s rewarding aspect makes it a great investment option. In FY2024, Visa Inc. generated $35.9 billion in revenue and earnings of $9.73 per share, up by 10% and 17% year-over-year, respectively. Visa’s total payments and cash volume reached $16 trillion in 2024, and the network processed over 234 billion total transactions.
Visa Inc. (NYSE:V) continues to evolve its growing business with AI integration across its VAS offerings, which assists merchants and financial institutions in avoiding fraudulent activities and protecting users’ data.
3. NVIDIA Corporation (NASDAQ:NVDA)
No. of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is the most discussed company in this AI boom, renowned for its semiconductor business and its groundbreaking AI GPUs, gaming, and data centres.
NVIDIA continues to grow its earnings driven by high demand for its AI products and services. The company delivered another record quarter in Q4 2024. NVIDIA Corporation posted quarterly revenue of $22.1 billion, up by 265% year-over-year and well above the $20 billion quarterly outlook. The full-year 2024 revenue was $60.9 billion, up 126% from a year ago.
For the first quarter of 2025, the company expects revenue to be around $24 billion, above or below 2%. NVDA expects sequential growth in data centres, mainly driven by the seasonal decline in gaming. Barclays analyst Tom O’Malley expects NVIDIA Corporation’s GPU sales to reach $100 billion in 2024 and projects them to grow to $160 billion in 2025. The analyst pointed out that custom silicon will grow at a faster CAGR of 55% in the next three years, and NVDA will significantly benefit from it.
2. Microsoft Corporation (NASDAQ:MSFT)
No. of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech giant. The company has unmatched achievements within the enterprise ecosystem, driven by integrated solutions designed specifically for business needs. Microsoft’s Intelligent Cloud segment, Azure, has become the company’s leading growth driver.
In FY2024, Microsoft Corporation (NASDAQ:MSFT) generated $211 billion in revenue, mainly driven by Azure as it accounted for 43% of the total sales. At 22%, Azure holds the second-largest share of the global cloud market after AWS. Azure’s hybrid cloud features effectively merge on-premises and cloud-based systems, making it highly efficient for enterprise customers. The segment’s 67% gross margin in 2024 reflects its scalability and profitability across the company’s cloud services, playing a vital role in MSFT’s overall business growth.
In Q1 FY2025, Microsoft Corporation’s revenue was reported at $65.6 billion, up 16% from a year ago. Operating income was recorded at around $30.6 billion, up by 14% year-over-year. The company’s cloud segment experienced a 33% increase in Azure and other cloud services. The company ended Q1 with more than $20.8 billion in cash and cash equivalents. The growing AI infrastructure in the U.S. will allow Microsoft to expand its cloud operations and integrate with new clients.
1. Amazon.com, Inc. (NASDAQ:AMZN)
No. of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) is a global leader in e-commerce, cloud computing, and digital streaming. Amazon is one of the most diversified companies and earns through retail sales, third-party marketplace fees, and subscription services such as Amazon Prime, and AWS. The company’s consumers include individuals, corporations, and government organizations.
On January 22, Cantor Fitzgerald analyst Deepak Mathivanan reaffirmed an Overweight rating on AMZN and maintained a price target of $270. The analyst highlighted Amazon.com, Inc.’s strong positioning among mega-cap companies and its strength in e-commerce and cloud business. Mathivanan further pointed out that the investor sentiment is aligned with AMZN’s positive outlook, driven by strong revenue growth of 11.93% year-over-year in Q3 2024.
Amazon.com, Inc. (NASDAQ:AMZN) will continue to deliver strong results, benefiting from the growing demand for AI, mainly in inference workloads. AWS enjoys the highest global cloud market share and has a robust infrastructure and well-established customer relationships, which are key to its continued growth.
While we acknowledge the potential of AMZN to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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