We recently published a list of The Best and Worst Dow Stocks for the Next 12 Months. In this article, we are going to take a look at where Amazon.com Inc. (NASDAQ:AMZN) stands against other best and worst dow stocks for the next 12 months.
The Dow Jones Industrial Average (DJIA), or the Dow, is a price-weighted index that has long been seen as a barometer of the health of the U.S. economy. After touching all-time highs in late November 2024, the index has corrected nearly 7% in 2025 (as of April 23) and is down 12% from its highs. Rightly so, the correction reflects several unfavourable developments, including economic uncertainties and geopolitical tensions weighing on economic growth. The market is expected to remain volatile as the trade and other aspects of the US administration’s policy agenda play out.
Amid this volatility, based on the potential for share price appreciation in the next 12 months, we have created a selection of the best and worst Dow stocks from the 30 Dow constituent stocks.
Has This Been the Most Volatile Period for The Dow?
If we analyse its trackable history from 1899, the Dow has fallen 7% or more on a single day twenty times. Of those, only seven occurred after the year 2000, and the 5.5% decline on April 5, 2025, doesn’t count as one of those seven, or not even in the historical top twenty. So, technically, this correction was not as severe as earlier. From corrections post 2000, the sharp declines when Covid-19 struck were the most noticeable – Dow fell 7.8%, 10%, and 12% on 9, 12, and 16th March, respectively, and saw further significant declines in that year.
That said, the current period remains one of the most confusing times for market participants, even for the larger players in the equity market, who remain uncertain about their estimates for the broader markets, such as the Dow.
Is Volatility Expected to Continue?
In a recent interview, Lauren Goodwin, Chief Market Strategist at New York Life Investments, emphasized that the fundamental picture remains cloudy and investors are still looking for clarity in macroeconomic fundamentals. Despite some positive economic data recently, policy uncertainty is limiting visibility. As more data is released, she believes markets are entering a sustained period of elevated volatility across equities and fixed income.
What is The Best Way Forward for Investors?
In these testing times, investors should examine fundamentals more critically, preferring Dow stocks with earnings resilience, clear competitive advantages, and exposure to long-term, secular growth themes. On April 28, Stephanie Link, Hightower Advisors’ chief investment strategist, shared her positive outlook on the stock market in an interview on CNBC. With major tech companies, consumer, and financial companies set to announce results, she believes that if corporate earnings remain strong, the recent market rebound could continue. Since early April, the market has recovered significantly, and she attributed the rally to better-than-expected profit margins and steady corporate performance. Although the prominent tech names aren’t cheap in terms of valuation, she views the recent declines as long-term buying opportunities.
While markets may remain volatile in the coming months, the best opportunities in the Dow over the next 12 months should come from stocks with strong pricing power and earnings momentum. Investors should stick to stocks with strong brands, recurring revenue models, and competitive moats, which enable them to navigate macro uncertainty. Since the Dow comprises large-cap companies across various industries, these stocks might perform better during sell-offs.
Our Methodology
To identify the best and worst Dow stocks, we began with the 30 constituent stocks of the DJIA Index. We then ranked these stocks in ascending order based on the consensus 1-year median potential upside. Additionally, we also include data on hedge funds holding stakes in these stocks, utilizing Insider Monkey’s Q4 2024 hedge fund database to provide deeper insights into institutional investor trends.
It is important to note here that the terms “best” and “worst” refer strictly to the relative upside potential and do not imply any fundamental strengths or weaknesses of the underlying companies.
Note: All pricing data is as of market close on April 23.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
Is Amazon.com Inc. (AMZN) the Best Dow Stock for the Next 12 Months?
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com Inc. (NASDAQ:AMZN) is involved in retail e-commerce, content subscription services (Prime Video), advertising, and cloud computing. The company’s product offerings through its online and offline stores include merchandise and media content acquired for resale and products from third-party sellers. Additionally, Amazon.com Inc. (NASDAQ:AMZN) operates one of the largest data center networks globally through its Amazon Web Services (AWS) division. AWS provides a comprehensive suite of cloud services, including computing power, storage options, and networking capabilities, catering to a diverse range of customers from startups to large enterprises.
Despite the correction in the Magnificent Seven stocks, Amazon remains a consensus Buy. Analysts still expect the stock to reach $250 in one year, implying over 38% upside potential. In their “Alger Spectra Fund” Q1 2025 investor letter, portfolio managers at investment management company Fred Alger Management highlighted the underperformance of Amazon in Q1 because of tariff concerns and subsequent increase in operational costs and impact on consumer spending. They also highlighted softer Q1 sales guidance and high cloud and AI capex impact on profitability as the reason for the underperformance.
Despite this, the portfolio managers maintained their confidence in Amazon.com Inc. (NASDAQ:AMZN), driven by its strong fundamentals. The company continues to derive strength from its diversified business model and product and service innovation. They also highlighted the company’s dominant position in high-growth areas like e-commerce and cloud computing as the reason for their optimistic view.
On April 25, William Blair analyst Dylan Carden reaffirmed his Buy rating on the company as he believes Amazon.com Inc. (NASDAQ:AMZN) is better positioned to handle the ongoing challenges.
Overall, AMZN ranks 4th on our list of best and worst dow stocks for the next 12 months. While we acknowledge the potential of Dow stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
