The Dow Jones index has pulled back lately and fallen by over 5% from its December highs as bond yields soared. It ended the year at $42,665, down from last year’s high of $45,000. So, what next for the DIA index in 2025, and will its top laggards become the biggest winners in 2025?
Dow Jones index losers could become gainers
The Dow Jones index had a fairly good performance in 2024. However, there were a few blue-chip companies that ended the year in the red. Historically, it has paid well to invest in top losers as they often turn around in the next year.
Boeing stock price crashed by 32% in 2024 as the company moved from one big issue to another. This crash made it the worst-performing company in the Dow Jones index other than the demoted Intel and Walgreens Boots Alliance.
Boeing stock could bounce back in 2025 as the new CEO continues turning around the company. For one, the firm has already raised cash, making another potential capital raising unnecessary.
Most importantly, Boeing planes have not had any major issue in the past few months. The most recent potential crisis was the Jeju Air crash involving a 737-800 plane. However, most experts believe that this was an airline or a pilot-related crash since the plane was 15 years old.
Therefore, Boeing shares will likely rebound if the company remains out of the spotlight during the year.
Nike stock could rebound if turnaround shows results
Nike stock price also crashed by over 30%, making it the second-worst-performing company in the Dow Jones index. Its performance diverged from Adidas, the German rival whose stock jumped by over 20%.
Nike’s performance has been impacted by its decision to focus on direct-to-consumer, bypassing traditional retailers like Footlocker. At the same time, its sneaker business has been highly volatile. It also sees robust competition across all its brands and weaker sales in China.
On the positive side, Nike is a highly popular brand with a new CEO, Elliot Hill, who is tasked with turning it around. Hill wants to refocus the business on sports like football, basketball, and soccer. He also wants to focus closely on inventory management to avoid saturation and boost margins.
Like all turnaround strategies, his approach will take time. Nonetheless, signs that the company is doing well could push the stock much higher in 2025.
Read more: Why Nike’s CEO believes turnaround efforts could hurt in the short term
Amgen stock price crashed in 2024, reaching a low of $253, down by over 25% from its highest level during the year. Some of this weakness happened after the company published quarterly results that missed analysts estimates a few months ago.
These numbers showed that its revenue rose by 23% in the third quarter, with ten products having double-digit growth. The company also published solid results of its weight-loss drug, which could lead to more sales in 2025.
The other top laggards that could become winners in 2025 are Merck, Johnson & Johnson, UnitedHealth Group, and Chevron.
Big winners in the Dow Jones may lag in 2025
It is also common for big winners in a year to become top laggards in 2025. In this case, that would mean highly valued companies like NVIDIA, Walmart, American Express, Goldman Sachs, Amazon, and 3M will suffer a harsh reversal.
NVIDIA is a top concern because there are signs that demand for its AI chips may start to drop later this year. While AI language models have become more advanced, there are signs that the industry growth is slowing.
NVIDIA will also likely see more competition from AMD, which has already gained market share in the industry.
Walmart stock price could also drop in 2025 because of its valuation concerns. The same is true with other Dow Jones index firms like Amazon and American Express.
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