A broad rally in US stocks has followed the election of Donald Trump as president, sending indexes to record highs.
NVDA, AMZN, V and CRM stocks are in a strong strategic position to take advantage of this trend.
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Wall Street witnessed its best week of the year, with indexes closing at record highs. The Dow, the S&P 500, and the Nasdaq closed 4.6%, 4.7%, and 5.7% higher for the week, respectively, fueled by a broad rally following Donald Trump’s Presidential election win.
The Dow particularly crossed multiple milestones last week, with the blue-chip index poised for further gains in the near term. Given the positive sentiment, investors should bet on these four fundamentally strong blue-chip stocks, namely NVIDIA Corporation NVDA, Amazon.com, Inc. AMZN, Visa Inc. V and Salesforce, Inc. CRM.
These companies are strategically positioned to take advantage of the overall upward trend in the market. These stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and assure good returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
On Friday, the Dow extended its rally rising 259.65 points or 0.6% to hit 44,000 points for the first time. The index, however, closed slightly lower at 43,988.99 points. Although it has been a strong week across the board for stocks, the Dow witnessed one of its best weeks in years.
Earlier on Wednesday, the blue-chip index surged more than 1,500 points following Trump’s landslide victory in the U.S. election. This was the biggest single-day gain for the Dow since November 2022 and the biggest post-election surge in 128 years.
In another big boost to equities, the Federal Reserve cut interest rates by 25 basis points on Thursday, the second consecutive cut after it increased interest rates by 525 basis points since March 2022 to curb sky-high inflation. This further fueled the ongoing rally.
Wall Street is getting a boost from the ongoing investor optimism following Trump’s win and the Federal Reserve’s monetary policy stance. After Trump’s victory, investors are expecting lower taxes and fewer regulations, as they view the new president as someone who openly discusses topics such as the stock market and the dollar.
Markets have traditionally performed well in election years, with indexes surging after the election results. In 2020, the Dow ended at around 28,000 at the end of October and surged past 30,000 just days after the election in November. History has been repeated but the Dow’s surge has been phenomenal this time.
Moreover, investors are optimistic that the Federal Reserve will continue with its rate cuts as inflation is cooling and is on track to reach its 2% target. The Federal Reserve has already cut interest rates by 75 basis points since September, bringing its current benchmark policy rate to the range of 4.5-4.75%.
Also, the Fed’s latest dot plot indicates that the funds rate is expected to decrease to a range of 4.25% to 4.5% by the year-end, with a projected reduction of one percentage point in 2025 and another half-point cut in 2026. This would lead to a final rate range of 2.75% to 3%.
NVIDIA Corporation 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 Corporation’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings improved 4.5% over the past 60 days. NVDA presently has a Zacks Rank #3.
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Amazon.com, Inc. 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 the company’s 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 78.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.2% over the last 60 days. AMZN presently carries a Zacks Rank #2.
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Visa Inc. operates as a payments technology company all over the world. V provides transaction processing services (primarily authorization, clearing and settlement) to financial institutions and merchant clients through VisaNet, its global processing platform.
Visa has an expected earnings growth rate of 11.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 60 days. V presently carries a Zacks Rank #2.
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Salesforce, Inc. is the leading provider of on-demand Customer Relationship Management (CRM) software, which enables organizations to better manage critical operations, such as sales force automation, customer service and support, marketing automation, document management, analytics and custom application development. Over the course of two and a half decades, CRM has established itself as the world’s leading CRM vendor with a market share of nearly 20%, according to the reports of Gartner, a global research and advisory firm.
Salesforce has an expected earnings growth rate of 22.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. CRM currently has a Zacks Rank #2.
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