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10 Best Dow Stocks to Buy for 2027

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Yahoo Finance reported on November 5 that the Dow Jones Industrial Average tumbled 3.4%, or more than 1,800 points, while the S&P 500 fell 4.4% and the Nasdaq Composite sank 5.5% into correction territory. Chip stocks took the brunt of the damage, with AI chip designers and memory makers among the hardest hit. The slide erased the gains from a day earlier, when the Dow had jumped 3% for its best session of 2026 after Democrats won control of both chambers of Congress, Yahoo Finance wrote on November 4. By mid-session Thursday, the index was heading for its worst second day after a midterm election in data going back to 1896, the outlet noted.

The Dow’s Safe-Haven Run Cracks

For most of the week, the Dow had looked like the sheltered corner of the market. Yahoo Finance reported on November 2 that the Dow edged up 0.4% while the Nasdaq dropped roughly 1% as investors rotated out of technology names and into consumer cyclical and financial services shares, which left the Dow looking like the market’s relative winner. On Thursday, that cushion gave way, as the focus turned to what a Democratic Congress could mean for the AI buildout, and for the data centers driving it in particular. You might also be interested in reading our piece on how the AI chip leader’s growth compares with the cloud software giant’s.

The reversal was fast and violent. Shay Boloor, chief market strategist at an equity research firm, pointed out that the VIX volatility index posted its biggest one-day jump in more than two years. It took the Nasdaq just six minutes on Thursday to erase its entire post-election rally, and even Wednesday’s winners such as the iPhone maker turned lower. That Wednesday buying had been helped by falling oil prices, while the Windows maker jumped 6% to a record high.

A Jobs Report Steadies the Tape

Friday brought a partial rebound. Yahoo Finance reported on November 6 that the US added 165,000 jobs in October, and the Nasdaq gained 1.9% while the S&P 500 rose 1% and the Dow added 0.1%. For a closer look at one of the biggest AI spenders caught in the sell-off, we recently covered why the search giant’s low price-to-earnings ratio can mislead. The stronger jobs data lifted Treasury yields and kept Federal Reserve policy at the center of market attention, Reuters reported on November 6, as the price-weighted index of 30 major US companies held roughly flat.

Our Methodology

For this article, we used Finviz to screen Dow Jones Industrial Average components for stocks rated Buy or better by analysts, with an average price target at least 10% above the current price. We then ranked them by average upside potential, based on analysts’ average price target, in ascending order. We also list short interest and the number of hedge fund holders as of Q2 2026.

Note: All data was sourced on November 6, 2026.

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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).

10 Best Dow Stocks to Buy for 2027

10. Microsoft (NASDAQ:MSFT)

Number of Hedge Fund Holders: 273

Short Interest: 0.90%

Average Upside Potential: 19%

Microsoft’s cloud engine is speeding up from an already enormous base. Azure revenue grew 48% in the fiscal first quarter, ahead of the company’s own forecast, even though some third-party data center capacity arrived late. Management guided Azure growth of 49% to 50% for the fiscal second quarter, and Chief Financial Officer Amy Hood said customer demand continues to exceed available supply.

Analysts took the report as proof that AI spending is turning into revenue. On October 29, TD Cowen’s Derrick Wood raised his Azure growth estimate for fiscal 2027 and lifted his price target to $650 from $625. William Blair’s Jason Ader said the results reinforced his view that the AI thesis is playing out across both the infrastructure and application layers. BofA’s Tal Liani reiterated a Buy rating and argued that Microsoft’s reach across infrastructure, AI models and software gives it several ways to earn money from AI demand.

Contracted demand adds a cushion, since commercial remaining performance obligation, a gauge of revenue already signed, reached $677 billion. That backlog, plus efficiency gains that squeeze more revenue from existing GPU and CPU capacity, is why bulls see cloud growth holding up while new capacity arrives late.

Read our analysis on Microsoft (NASDAQ:MSFT) here: Microsoft (MSFT) Built a $100B Azure. Can It Outrun Its Own Spending?

9. Goldman Sachs (NYSE:GS)

Number of Hedge Fund Holders: 92

Short Interest: 2.42%

Average Upside Potential: 20%

Goldman Sachs is the Dow’s most direct play on a busy capital markets cycle. Third-quarter net revenues reached $18.68 billion, the second highest in the firm’s history. Equities trading drove much of the result, with revenue up 72%, while advisory revenue set a quarterly record as completed mergers and acquisitions climbed.

The firm still ranks first in announced M&A, and management said its investment banking backlog stayed strong even after a strong quarter, helped by steady replenishment in equity underwriting. Executives also noted that private equity sponsors are taking a smaller share of announced deals than they historically have, which leaves room for activity to pick up further when that group returns. Chief Executive David Solomon said clients keep turning to the bank for advice, execution and financing.

The steadier side of the business matters just as much. Assets under supervision hit a record $4.1 trillion, supported by long-term net inflows for a 35th straight quarter, which feeds management fees that do not depend on deal timing. Management also raised its full-year fundraising target for alternative assets, which adds fee income that moves less with market swings.

Our analysis on Goldman Sachs (NYSE:GS) is available here: Jim Cramer on Goldman Sachs (GS): “It’s Come Down Greatly”

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