Can 2024's Best-Performing Dow Jones Stock Beat the S&P 500 in 2025?

As the calendar turns to 2025, investors are looking ahead to see which stocks will continue to outperform. One standout from 2024 was Nvidia (NVDA), which surged by more than 170% and briefly became the most valuable company in the world. But can this AI chip leader maintain its momentum and beat the broader market in the coming year? Let's examine Nvidia's prospects and compare them to the S&P 500.

Nvidia's exceptional performance in 2024 can be attributed to several key factors. First, the company is the clear U.S. leader in advanced semiconductors for artificial intelligence (AI) applications and accelerated computing. Its cutting-edge products and strong culture of innovation have positioned it well to capitalize on the AI boom. Second, Nvidia consistently surpassed analysts' expectations when reporting quarterly financial results. In November 2024, the chip firm posted a 103% surge in quarterly earnings, above expectations, as revenue almost doubled, surging 94%. Nvidia's revenue guidance also slightly topped views. Third, Nvidia's focus on AI and gaming markets has driven robust growth. The company's new Blackwell architecture is expected to maintain this momentum, despite mixed near-term data and increasing competition from companies like Marvell and Broadcom. Finally, Nvidia's inclusion in the Dow Jones Industrial Average on November 8, 2024, further boosted its visibility and investor interest.