Nvidia’s inclusion in the Dow Jones Industrial Average on November 8, replacing Intel (INTC), marked a significant milestone for the AI chip giant. Throughout 2024, Nvidia (NVDA) became the standout performer in the index, with its stock price soaring by more than 170%, leading it to a $3 trillion market valuation. This growth positioned Nvidia as the second most valuable company globally, briefly surpassing even Apple (AAPL) for the top spot. This performance significantly outpaced the broader market, with the Dow Jones (^DJI) gaining 12.88%, the Nasdaq (^IXIC) rising 28.64%, and the S&P 500 (^GSPC) increasing by 23.31%.
Despite Nvidia’s stellar year, there are concerns about the sustainability of its growth. Morgan Stanley (MS) has highlighted issues such as the slowing production of Nvidia’s Hopper GPUs and staggered readiness of their Blackwell products, alongside increasing competition from companies like Marvell (MRVL) and Broadcom (AVGO) in the AI-focused Application-Specific Integrated Circuit (ASIC) market. However, Morgan Stanley remains optimistic about Nvidia, maintaining an ‘overweight’ rating and a $166 price target. The firm believes that robust demand for Nvidia’s new Blackwell architecture will “prevail,” outweighing current market debates. Additionally, they highlight strong underlying dynamics that support this outlook, even in the face of mixed near-term data.
Shifting focus to other sectors within the Dow, Walmart (WMT) has shown substantial gains, up nearly 72% in 2024, making it the second-best performer in the index. This success is attributed to its strategic investments in omnichannel infrastructure, consistent market share gains, and a stable customer base. Analysts at Telsey Advisory Group have marked Walmart as a top pick for 2025, expecting the retailer to leverage social media, enhance consumer service, and streamline supply chains. BMO Capital also sees a bright future, raising their price target to $110 from $100, while maintaining an ‘Outperform’ rating on the shares. They attribute this optimism to Walmart’s strong positioning in an increasingly digital retail landscape.
American Express (AXP), securing the third spot with a 58.4% rise, has successfully stabilized its performance despite earlier concerns about rising delinquencies. Morgan Stanley anticipates continued support for AmEx in 2025, citing easing inflation, positive real wage growth, stable-to-lower interest rates, and rational lending standards as key drivers. Reflecting this outlook, the firm has raised its price target to $305 from $252 while maintaining an ‘equal weight’ rating.
Goldman Sachs (GS), up 48.44%, demonstrated resilience and strategic focus. CEO David Solomon emphasized the strength of Goldman’s interconnected franchises during the third-quarter earnings call, highlighting its role as a premier M&A advisor and risk intermediary. JP Morgan (JPM) has a positive outlook, raising their price target to $550 from $520, anticipating benefits from improved capital markets activity and potential deregulation in a second Trump administration.
It should be noted that the consensus among various analysts indicates a generally positive sentiment towards Goldman Sachs, with targets ranging from $550 to $600 from other institutions like Wells Fargo (WFC) and Morgan Stanley (MS), reflecting a strong belief in the bank’s continued success.
Lastly, Amazon (AMZN), with a 44.39% increase, rounded out the top performers. The e-commerce giant’s integration of AI across its operations, coupled with robust retail trends and superior fulfillment capabilities, has been well-received by analysts. Tigress Financial analyst Ivan Feinseth increased the price target to $290 from $245, maintaining a ‘buy’ rating, underscoring Amazon’s strategic use of AI as a key growth driver.
Overall, these companies’ performances in 2024 reflect both sector-specific strengths and broader economic trends, with each leveraging unique advantages or facing specific challenges. Nvidia’s dominance in AI technology, Walmart’s retail innovation, AmEx’s financial stability, Goldman Sachs’ strategic refocusing, and Amazon’s AI integration highlight the diverse paths to success within the Dow Jones Industrial Average.
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