3 Unstoppable Stocks to Buy When the Dow is at an All-Time High

All the best belatedly, bull market. A new bull market began on October 12, 2022. Tech stocks led the way then and continue to do so today, driven by increasing demand for all things artificial intelligence (AI).

However, the venerable one Dow Jones Industrial Average (^DJI 0.47%) holds up. The Dow is up nearly 47% since the start of the bull market. Are there still some Dow stocks worth buying? Absolutely. Here are three unstoppable stocks to buy when the Dow Jones is at an all-time high.

1. Amazon

Amazon (AMZN -0.68%) is a relatively new member of the Dow Jones Industrial Average. The e-commerce and cloud services giant has been replaced Walgreens Boots Alliance in February 2024. Amazon has been a great addition to the Dow so far, outperforming many other stocks in the index this year.

Perhaps the best indicator of Amazon’s strength is its rapidly improving free cash flow. The company generated free cash flow of $53 billion in the trailing twelve months ended June 30, 2024, compared to $7.9 billion in the trailing twelve months ended June 30, 2023.

Amazon’s cloud business, Amazon Web Services (AWS), continues to be the company’s key growth driver. Organizations around the world are migrating to the cloud. AI, particularly generative AI, is accelerating this trend. Amazon CEO Andy Jassy said in August that AWS remained “customers’ first choice” largely because of its broad functionality.

But Amazon is always looking for new growth opportunities. The company found one through advertising. In the second quarter of 2024, advertising services revenue increased 20% year-over-year (excluding foreign exchange rates), slightly higher than AWS revenue growth. Jassy said on the second-quarter earnings call that Amazon is “at the very beginning of what’s possible in our video advertising.”

2. The Home Depot

The Home Depot (HD 0.85%) is not a newcomer to the Dow like Amazon. The leading home improvement retailer was added to the index on November 1, 1999. Home Depot has since more than quadrupled the Dow’s total return and continues to outperform the index in 2024.

Based on Q2 results, you might think that Home Depot doesn’t seem unstoppable. The company’s revenue increased just 0.6% year-over-year and would have declined 3.3% without the acquisition of SRS Distribution. However, this preliminary snapshot doesn’t tell the whole story about Home Depot’s prospects.

At Home Depot, notice one number: 42. That’s the average age of homes in the U.S., according to Statista. Given the large number of older homes, demand for home improvement supplies is likely to remain high in the coming years.

Home Depot also has another long-term tailwind. The United States continues to face a severe housing shortage. Zillow It is estimated that the country needs an additional 4.5 million homes. Home Depot should have a significant opportunity to provide materials to professionals building new homes over the next decade and beyond.

3. Visa

visa (v 1.02%) joined the Dow Jones Industrial Average on September 23, 2013. Since then, the payments technology company has nearly doubled the Dow’s total return.

Granted, Visa has underperformed the Dow in 2024. This underperformance is primarily due to regulatory issues. In June, a federal judge rejected a settlement between Visa, MasterCardand retailers via swipe fees. In September, the U.S. Department of Justice filed an antitrust lawsuit alleging that Visa monopolizes the debit network markets.

I’m not sure how these regulatory challenges will play out. Regardless of the results, however, Visa should remain a dominant force in the payments market.

And this market should continue to grow. Cash is on the way to the dinosaurs as people increasingly use digital payment methods. Visa could have a particularly big growth opportunity as the middle class expands in developing countries.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has positions at Amazon and Mastercard. The Motley Fool has positions in and recommends Amazon, Home Depot, Mastercard, Visa and Zillow Group. The Motley Fool recommends the following options: long $370 January 2025 calls on Mastercard and short $380 January 2025 calls on Mastercard. The Motley Fool has a disclosure policy.