The Dow Industrial Average underperformed the S&P 500 in 2023, making it an opportune time for investors to contemplate the best Dow stocks to purchase. As a yardstick for the strength of the U.S. stock market, the Dow, comprising 30 leading companies, is a substantial indicator for investors. Identifying these exceptional companies can yield substantial gains in 2024.

While the prior year proved to be robust for the overall stock market, the pursuit of stable returns takes on paramount importance. As the adage goes, past performance is no guarantee of future results. Therefore, investors should seek out companies in the Dow displaying undervaluation relative to their peers. And now, without further ado, here are the top three Dow stocks to acquire in January 2024!

Microsoft (MSFT)

Microsoft (NASDAQ:MSFT) stands out as the most compelling Dow stock to acquire for 2024. Despite the stock’s soar of over 60% in 2023, Microsoft is positioning itself to become the world’s most valuable company. Put simply, Apple’s glory days are waning, and Microsoft is ready to usurp its position. Apple has relished decades of robust growth and has been at the vanguard of technological innovation. However, Microsoft is now poised to dethrone it, with its AI prospects presenting an opportunity investors should not overlook.

Microsoft’s generative AI and Azure cloud strategy are just beginning to gain momentum. AI tailwinds are set to contribute to robust revenue, FCF, and EPS growth over the next decade. Once AI is fully integrated across its entire technology stack, Microsoft will be capable of escalating workloads and productivity for its clients. If there is one Dow stock to purchase in 2024, Microsoft would top the list tenfold.

Cisco Systems (CSCO)

Cisco Systems (NASDAQ:CSCO) stands out as one of the top Dow stocks to purchase in January 2024. Although shares lagged behind the broader market in 2023, Cisco’s financial metrics have displayed continuous improvement.

A paramount technology conglomerate in the United States, Cisco epitomizes leadership capabilities in the AI-powered cloud security race. In late September 2023, Cisco announced the acquisition of Splunk, an acquisition expected to yield positive cash flows and accelerate revenue and gross margin expansion.

According to their recent Q1 2024 financial results, Cisco delivered its most robust first quarter in the company’s history. Cisco’s revenue surged by 8%, with GAAP EPS showing a 37% year-over-year increase. The company’s adept execution contributed to robust operating leverage, with software revenue and product ARR witnessing double-digit growth. With a PE of 15, Cisco ranks among the top Dow stocks to contemplate for 2024.

JPMorgan Chase (JPM)

The JPMorgan Chase Story

A Dow Stock to Watch

JPMorgan Chase (NYSE: JPM) has emerged as a leading contender among Dow stocks for January 2024. The financial powerhouse, one of the world’s largest banks, is aggressively navigating toward a milestone $1 trillion market capitalization.

Financial Strength and Growth

Approaching the end of the 2023 fiscal year, JPMorgan Chase stands out as an enticing prospect for investors seeking Dow stocks to buy. Favorable macroeconomic conditions have spurred substantial revenue growth, increased profits, and expanded net interest income, propelling the company to its most robust financial position in its history.

Record-Breaking Performance

In Q3 2023, JPMorgan demonstrated outstanding financial performance, with a 23% year-over-year revenue surge to $39.9 billion. The company also achieved an all-time high in net interest income, reaching $22.9 billion. Despite prevailing challenges such as escalating interest rates and inflation, JPMorgan has shored up its liquidity and capitalized on opportunities arising from the regional banking crisis. Although growth may moderate in the upcoming fiscal year, JPMorgan presents an excellent value proposition, supported by its formidable balance sheet and resilience to economic headwinds.