Stocks Wall Street Think Will Push the Dow Over 40,000

The recent upward trajectory of the Dow Jones Industrial Average has positioned this venerable stock market index at the brink of an unprecedented achievement. Over the course of this week, the 30-stock average experienced a surge of more than 2%, propelling it to all-time highs and bringing it tantalizingly close to the 40,000 mark.

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Despite a slight dip in performance on Friday, the Dow remained within striking distance of this significant milestone, a remarkable feat considering its inception in 1896.

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This surge was primarily fueled by the Federal Reserve's reaffirmation of expectations for three rate cuts in 2024. Federal Reserve Chair Jerome Powell emphasized that even a robust labor market wouldn't dissuade the central bank from implementing policy easing measures. In light of these developments, CNBC Pro embarked on a quest to identify the stocks poised to propel the Dow beyond 40,000.

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Leveraging the Stock Screener tool, we conducted a screening for stocks featuring average analyst price targets indicating a potential upside of 10% or more over the next 12 months.

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Among the stocks identified, Apple made the cut. Despite facing pressure on Thursday, with a 4% decline following an antitrust lawsuit filed by the U.S. Department of Justice, Apple remains a focus. Year to date, its shares have retreated by more than 11%. However, analysts are not abandoning their bullish stance on Apple just yet, with 57% of those surveyed by FactSet maintaining a buy or overweight rating on the stock.

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Morgan Stanley's Erik Woodring suggested that Wall Street might be overlooking Apple's advancements in artificial intelligence, which could significantly enhance future iPhone capabilities and potentially outweigh concerns about June quarter estimates and the ongoing DOJ lawsuit.

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Similarly, Boeing emerged as another contender. Despite enduring a rough patch in 2024, with its shares down nearly 27%, Boeing remains under scrutiny due to safety issues associated with its 737 Max aircraft. Nevertheless, 69% of analysts polled by FactSet continue to advocate for a buy or overweight rating on Boeing stock.

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Average analyst price targets indicate a potential upside of 36%, according to LSEG. UBS analyst Gavin Parson highlighted the current scenario as a favorable buying opportunity, particularly from a multi-year perspective. Parson reiterated a buy rating on Boeing stock with a $275 per share price target, implying nearly 47% upside from Thursday's closing price.

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Additional potential frontrunners capable of propelling the Dow towards the 40,000 milestone include recent addition Amazon and energy behemoth Chevron.

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