Wall Street ended mixed in the final week of 2025, with the Santa Claus rally losing fizz. However, markets appear to have resumed the rally this year, with indexes soaring to record highs.
On Tuesday, the Dow hit an all-time intraday and closing high, fueled by a rally in artificial intelligence (AI) stocks. Tech stocks, particularly those with a focus on AI stocks, have been driving the broader market rally.
Given the positive sentiment, investors should bet on these three fundamentally strong blue-chip stocks, namely Amazon.com, Inc. AMZN, NVIDIA Corporation NVDA and Microsoft Corporation MSFT.
These companies are well-positioned to benefit from the market’s overall upward trend, offering the potential for solid returns. These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dow Hits Record High
The Dow gained 1% or 484.90 points to close at an all-time high of 49,462.08 points, after hitting a record intraday high. This is the second record closing high for the blue-chip index in just the third trading day of the year.
A tech rally, coupled with fresh geopolitical developments, has lately been boosting the 30-stock benchmark. The jump on Monday and Tuesday came after the United States captured Venezuelan President Nicolas Maduro in a raid over the weekend. Maduro’s arrest by the United States was followed by President Donald Trump’s announcement, wherein he encouraged big U.S. oil companies to invest in Venezuela.
This sent energy stocks on a rally. However, it’s the tech stocks that have been driving the broader market since 2023. The decline in the final weeks of 2025 came after AI stocks tumbled on growing concerns over their sky-high valuations.
However, investors appear to have put aside those concerns, as their appetite for riskier assets seems to be back on track this year, with AI stocks rallying once again. The Dow has been benefiting from these factors after gaining nearly 13% in 2025.
The AI boom is likely to continue through 2026. The space is expected to see a surge in capital spending, with investors pouring money into data centers and other tech infrastructure to keep up with the growing demand for AI.
3 Dow Stocks With Upside
Amazon.com
Amazon.com is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program, well supported by its massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish a footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services.
Amazon.com has an expected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the past 60 days. AMZN presently carries a Zacks Rank #2.
NVIDIA
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA’s expected earnings growth rate for the current year is 55.9%. The Zacks Consensus Estimate for current-year earnings has improved 4.5% over the past 60 days. NVDA presently has a Zacks Rank #1.
Microsoft
Microsoft is one of the largest broad-based technology providers in the world. MSFT dominates the PC software market, with more than 73% of the market share for desktop operating systems. The Microsoft 365 application suite is one of the most popular productivity software suites globally. MSFT is also one of the prominent public cloud providers that can deliver a wide variety of infrastructure-as-a-service and platform-as-a-service solutions at scale.
Microsoft has an expected earnings growth rate of 14.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. MSFT presently carries a Zacks Rank #2.
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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