The recent surge in the Dow Jones Industrial Average has placed this historic stock market indicator on the verge of an extraordinary milestone. Throughout the week, the 30-stock average witnessed a notable increase of over 2%, surging to record highs and inching remarkably close to the coveted 40,000 threshold.
Despite experiencing a slight decline in performance on Friday, the Dow continued to hover within range of this momentous achievement, underscoring its resilience and longevity since its inception in 1896.
The recent surge in stock market momentum finds its roots in the Federal Reserve’s steadfast commitment to potential rate cuts in 2024.
Even with a robust labor market, Federal Reserve Chair Jerome Powell has reiterated the central bank’s readiness to implement policy-easing measures.
Against this backdrop, CNBC Pro undertook a comprehensive analysis to pinpoint the stocks that could be instrumental in propelling the Dow Jones Industrial Average beyond the historic 40,000 mark.
Utilizing the powerful Stock Screener tool, we conducted a thorough screening process, focusing on stocks with average analyst price targets suggesting a potential upside of 10% or more within the next 12 months.
Among the standout contenders, tech giant Apple stood out prominently. Despite experiencing a 4% downturn on Thursday, attributed to an antitrust lawsuit filed by the U.S. Department of Justice, Apple remains firmly in the spotlight.
Despite a year-to-date decline of over 11%, analysts continue to maintain an optimistic outlook on Apple’s prospects. A significant 57% of analysts surveyed by FactSet have retained either a buy or overweight rating on the stock, underscoring their confidence in its future plans.
Morgan Stanley’s Erik Woodring pointed out a possible oversight on Wall Street’s part regarding Apple’s strides in artificial intelligence. He suggested that these advancements could significantly boost future iPhone capabilities, potentially overshadowing concerns about June quarter estimates and the ongoing DOJ lawsuit.
Another contender for driving the Dow over 40,000 is Boeing. Despite a challenging period in 2024, marked by a nearly 27% decrease in its shares, Boeing remains in focus due to safety issues linked with its 737 Max aircraft.
Nonetheless, a substantial 69% of analysts surveyed by FactSet maintain a buy or overweight rating on Boeing stock.
According to LSEG, average analyst price targets indicate a promising upside of 36%. UBS analyst Gavin Parson views the current situation as an advantageous buying opportunity, especially from a multi-year perspective.
Parson reaffirmed a buy rating on Boeing stock, setting a $275 per share price target, suggesting a potential increase of almost 47% from Thursday’s closing price.
Other potential frontrunners that could drive the Dow towards the 40,000 mark include the recent addition of Amazon and energy giant Chevron.
