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Dow Achieves a New Milestone: 4 Blue-Chip Stocks to Buy
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Key Takeaways
Cisco Systems sees strong AI-driven demand, with AI infrastructure orders projected at $9B in fiscal 2026.
Caterpillar is benefiting from rising AI data center power demand and plans to expand output capacity.
Visa and Coca-Cola are supported by payment growth, innovation, pricing and margin expansion.
On June 16, the Dow achieved a new milestone. The index advanced 0.64% or 328.64 points to close at a record high of 51,999.67. At intraday high, the blue-chip index touched an all-time high of 52,190.29. The index touched the crucial technical barrier of 52,000 for the first time in its history.
Dow’s momentum is likely to continue in the near term. Technically, at its current level of 51,999.67, the Dow is well above its 50-day and 200-day moving averages of 51,275.10 and 50,574.67, respectively.
Historically, it has been noticed in the technical analysis space that whenever the 50-day moving average line surges ahead of the 200-day moving average line, a long-term uptrend for the asset (in this case, the Dow Index) becomes a strong possibility.
The chart below shows the price performance of our four picks year to date.
Image Source: Zacks Investment Research
Cisco Systems Inc.
Zacks Rank #2 Cisco Systems has been benefiting from strong product orders from hyperscalers, enterprises, service providers, the public sector and cloud customers. In the last reported quarter, CSCO generated record-high revenues primarily attributable to its networking portfolio, powered by Silicon One, AI-native security solutions and operating systems.
CSCO expects total artificial intelligence (AI) infrastructure orders to reach $9 billion in fiscal 2026, an increase of 4.5X from fiscal 2025. Overall product orders grew by a sizable 35% year over year in the third quarter. Of this, data center switching orders grew 40% from the year-ago period supported by massive AI-powered data center buildout.
Cisco has decided to retrench 4,000 manpower as part of a sweeping restructuring effort. Management said that this restructuring has been guided to give more emphasis to areas like AI networking infrastructure, network security, silicon and optics.
Cisco Systems has an expected revenue and earnings growth rate of 7.6% and 10.3%, respectively, for the next year (ending July 2027). The Zacks Consensus Estimate for next year’s earnings has improved 1.9% over the last 30 days.
Caterpillar Inc.
Zacks Rank #1 Caterpillar is gaining from rising AI data-center-related power demand. As big technology companies establish data centers globally to support their generative AI applications, CAT is witnessing robust order levels for reciprocating engines for data centers. The company is planning to double its output with a multi-year capital investment.
CAT has also revised its target of growing Power Generation sales to more than 3.0X from the earlier stated 2.0X target by 2030. CAT announced another agreement to provide PROPWR up to 2.1 gigawatts of large gas generator sets for prime power generation in support of data center, oil and gas and industrial applications.
Caterpillar has an expected revenue and earnings growth rate of 13.2% and 29.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 7.8% in the last 60 days.
Visa Inc.
Zacks Rank #2 Visa’s scale and brand strength keep it at the center of global digital payments, with growth still driven by higher payment volumes, cross-border activity, and increasing transaction counts.
V’s fiscal second-quarter results showed broad momentum across consumer payments, commercial and money movement solutions, and value-added services. Management guides to low-teens revenue growth for fiscal 2026.
Investments in agentic commerce and stablecoin settlement, alongside targeted acquisitions and disciplined capital returns, should continue to extend its network value over time. With fraud cases on the rise and AI adoption increasing, V’s services are in high demand. Visa has embedded AI and generative AI into over 100 products, primarily for fraud prevention and cybersecurity.
Visa has an expected revenue and earnings growth rate of 13.4% and 14.1%, respectively, for the current year (ending September 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 2% over the last 60 days.
The Coca-Cola Co.
Zacks Rank #2 Coca-Cola is benefiting from the strength of its portfolio breadth, consistent share gains and improving margins driven by pricing and productivity efforts. Innovation, marketing and digital initiatives are enhancing consumer engagement and execution, while diversified categories reduce risk.
KO projects steady organic revenue and EPS growth, backed by a durable global distribution moat. Our model predicts KO’s organic revenue growth of 4.8% and comparable EPS to grow 8.8% for 2026. KO’s robust cash generation supports reinvestments and sustainable shareholder returns, including continued dividend growth.
Coca-Cola has an expected revenue and earnings growth rate of 3% and 8.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Dow Achieves a New Milestone: 4 Blue-Chip Stocks to Buy
Key Takeaways
On June 16, the Dow achieved a new milestone. The index advanced 0.64% or 328.64 points to close at a record high of 51,999.67. At intraday high, the blue-chip index touched an all-time high of 52,190.29. The index touched the crucial technical barrier of 52,000 for the first time in its history.
Dow’s momentum is likely to continue in the near term. Technically, at its current level of 51,999.67, the Dow is well above its 50-day and 200-day moving averages of 51,275.10 and 50,574.67, respectively.
Historically, it has been noticed in the technical analysis space that whenever the 50-day moving average line surges ahead of the 200-day moving average line, a long-term uptrend for the asset (in this case, the Dow Index) becomes a strong possibility.
At this stage, it will be prudent to invest in blue-chip stocks with a favorable Zacks Rank. Four such stocks are: Cisco Systems Inc. (CSCO - Free Report) , Caterpillar Inc. (CAT - Free Report) , Visa Inc. (V - Free Report) and The Coca-Cola Co. (KO - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our four picks year to date.
Image Source: Zacks Investment Research
Cisco Systems Inc.
Zacks Rank #2 Cisco Systems has been benefiting from strong product orders from hyperscalers, enterprises, service providers, the public sector and cloud customers. In the last reported quarter, CSCO generated record-high revenues primarily attributable to its networking portfolio, powered by Silicon One, AI-native security solutions and operating systems.
CSCO expects total artificial intelligence (AI) infrastructure orders to reach $9 billion in fiscal 2026, an increase of 4.5X from fiscal 2025. Overall product orders grew by a sizable 35% year over year in the third quarter. Of this, data center switching orders grew 40% from the year-ago period supported by massive AI-powered data center buildout.
Cisco has decided to retrench 4,000 manpower as part of a sweeping restructuring effort. Management said that this restructuring has been guided to give more emphasis to areas like AI networking infrastructure, network security, silicon and optics.
Cisco Systems has an expected revenue and earnings growth rate of 7.6% and 10.3%, respectively, for the next year (ending July 2027). The Zacks Consensus Estimate for next year’s earnings has improved 1.9% over the last 30 days.
Caterpillar Inc.
Zacks Rank #1 Caterpillar is gaining from rising AI data-center-related power demand. As big technology companies establish data centers globally to support their generative AI applications, CAT is witnessing robust order levels for reciprocating engines for data centers. The company is planning to double its output with a multi-year capital investment.
CAT has also revised its target of growing Power Generation sales to more than 3.0X from the earlier stated 2.0X target by 2030. CAT announced another agreement to provide PROPWR up to 2.1 gigawatts of large gas generator sets for prime power generation in support of data center, oil and gas and industrial applications.
Caterpillar has an expected revenue and earnings growth rate of 13.2% and 29.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 7.8% in the last 60 days.
Visa Inc.
Zacks Rank #2 Visa’s scale and brand strength keep it at the center of global digital payments, with growth still driven by higher payment volumes, cross-border activity, and increasing transaction counts.
V’s fiscal second-quarter results showed broad momentum across consumer payments, commercial and money movement solutions, and value-added services. Management guides to low-teens revenue growth for fiscal 2026.
Investments in agentic commerce and stablecoin settlement, alongside targeted acquisitions and disciplined capital returns, should continue to extend its network value over time. With fraud cases on the rise and AI adoption increasing, V’s services are in high demand. Visa has embedded AI and generative AI into over 100 products, primarily for fraud prevention and cybersecurity.
Visa has an expected revenue and earnings growth rate of 13.4% and 14.1%, respectively, for the current year (ending September 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 2% over the last 60 days.
The Coca-Cola Co.
Zacks Rank #2 Coca-Cola is benefiting from the strength of its portfolio breadth, consistent share gains and improving margins driven by pricing and productivity efforts. Innovation, marketing and digital initiatives are enhancing consumer engagement and execution, while diversified categories reduce risk.
KO projects steady organic revenue and EPS growth, backed by a durable global distribution moat. Our model predicts KO’s organic revenue growth of 4.8% and comparable EPS to grow 8.8% for 2026. KO’s robust cash generation supports reinvestments and sustainable shareholder returns, including continued dividend growth.
Coca-Cola has an expected revenue and earnings growth rate of 3% and 8.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last 60 days.