Since last October, the Dow Jones Industrial Average has been riding another bull market higher. The venerable index gained 23% through March while regularly achieving new all-time highs. However, rising inflation and high-interest rates are taking their toll.
The Dow is up less than 3% in 2024, and its momentum has stalled. With volatility increasing and the possibility of interest rate cuts not coming until later in the year, it may be a bumpier ride for the market going forward.
Some stocks are still crushing the market, though. The tailwinds behind their businesses are too strong for these macroeconomic events to interfere with their growth trajectory. Here are three DJIA blue-chip stocks handily beating all comers with 22% or more gains this year.
Amazon (AMZN)
While artificial intelligence (AI) is undoubtedly behind part of Amazon‘s (NASDAQ:AMZN) performance, a bigger role is being played by more mundane management tactics like cost-cutting. It is helping to magnify the sales gains AI generates.
Net sales were up 13% in Amazon’s just reported quarter, with Amazon Web Services (AWS) jumping 17% from the year-ago period. As a result, Meta Platforms (NASDAQ:META) saw a big uptick in advertising; Amazon reported a 24% jump in ad sales to $11.8 billion. It also didn’t hurt that it began forcing-feeding ads on Amazon Prime video viewers. Yet AI ignited AWS growth, now running at a $100 billion annual revenue run rate.
Firing employees also helped boost operating income, which surged 20% in the quarter to $15.3 billion. The most recent job cuts came in AWS. Amazon previously cut hundreds of jobs across Prime Video, Amazon MGM Studios and the Twitch gaming service.
Amazon is now a leaner, more nimble company. It still possesses large growth potential across its services, so look for stock to build on the 22% gain it has made so far this year.
American Express (AXP)
The following fastest-growing blue-chip stock on the Dow is financial services stock American Express (NYSE:AXP). Shares are up 23% in 2024 as more people choose not to leave home without their AmEx credit card. First-quarter revenue rose 11% to $11.8 billion, and profits rocketed 39% higher to $3.33 per share. It handily beat Wall Street estimates on the top and bottom lines.
American Express is among the few companies benefiting from the Federal Reserve’s high-interest rate policies. Net interest income, or the amount of money it earns from customers who keep a balance on their accounts, jumped 26% year over year. Profits also benefitted from high consumer spending.
The credit card company has sought a younger demographic to help grow its business. The effort appears to be paying off. Chairman and CEO Stephen Squeri noted American Express continues “to see strong demand from Millennial and Gen Z consumers, who accounted for over 60 percent of new consumer account acquisitions globally.”
With best-in-class credit metrics, there’s little likelihood that America Express stock will falter.
Disney (DIS)
The top blue-chip stock on the Dow Jones Industrial Average so far this year is Disney (NYSE:DIS). Its stock is up 25% even after giving back 8% over the past month.
The proxy battle helped the entertainment star with billionaire investor Nelson Peltz, who sought two board seats. CEO Bog Iger beat back the effort by highlighting important changes Disney made. Among those were numerous cost-cutting efforts, such as investing $1.5 billion in video game maker Epic Games and clearing out the movie studio offices. It’s also clear a lot of these initiatives wouldn’t have occurred without the threat of a fight with Peltz.
An investment in Disney has been lousy for the past three years. Even after the big gains in 2024, the stock is still down 39% from 2021. That’s primarily because Disney movies are box-office bombs. Not a single one has been profitable in the last year or so. That’s because Disney abandoned the family-friendly fare it was famous for to immerse itself in the culture wars.
Disney has been coasting on the profits of its theme park segment. Attendance, though, was down in the first quarter compared to a year ago. That was due to the end of the year-long 50th-anniversary celebrations last year. However, revenue was higher this year as Disney has been raising prices.
Iger must follow through on his promise to give families the kind of entertainment they want. Now that the proxy battle is over, Disney needs to follow through on its other initiatives, or the gains it has made will evaporate.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
