The Dow Jones Industrial Average (DJINDICES: ^DJI) market index is an elite club. Its 30 components are some of the best businesses in America, hand-picked and maintained by the five financial experts on S&P Global's Averages Committee.
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The Dow members jumped through many hoops to reach that lofty position, and most of them should be solid investments in any economy. The well-known "Dogs of the Dow" investing strategy even looks for Dow stocks trading at a discount, with the assumption that these giants will recover from short-term problems. It's not an infallible strategy, but still a famous and theoretically reasonable one.
But there are different levels of excellence even in this top-shelf group. Three of the current Dow stocks strike me as no-brainer buys right now.
NYSE: IBM
Key Data Points
1. IBM
Quantum computing and artificial intelligence (AI) are two of the hottest business trends on the planet right now. IBM (IBM +0.59%) is a leading player in both fields, but Big Blue's stock is lagging behind other quantum and AI winners.
I mean, the market is starting to catch on. IBM's stock gained 29% year-to-date as of this writing on Oct. 23. But it still looks undervalued trading at 4.0 times sales and 23.4 times forward earnings estimates.
Last week's earnings report underscored IBM's AI and quantum computing muscle. AI-based contracts rose to $9.5 billion, up from $7.5 billion three months earlier. On the earnings call, IBM management celebrated technical advances in the quantum arena, targeting 2028 for the first error-corrected quantum computer.
And you can invest in IBM's thrilling technology at a deep discount. Fellow Dow members Microsoft (MSFT +1.47%) and Nvidia (NVDA +2.49%) also offer exposure to the AI and quantum computing trends, but their stocks are quite expensive. Microsoft trades at 11.3 times sales, while Nvidia's shares change hands at 44.3 times sales. IBM's price-to-sales ratio of 4.0 is a downright steal.
NYSE: AXP
Key Data Points
2. American Express
I don't get excited about bank stocks and financial services too often, but American Express (AXP +1.14%) makes the grade nowadays.
This longtime Warren Buffett favorite keeps beating analyst expectations, often with double-digit percentage growth on the top line and even stronger earnings gains. But it's more than just another boring bank-like success story.
American Express has always focused on customer service and unique card features. The legacy continues in 2025 as the company highlighted AI adoption among small businesses, added a substantial Squarespace credit to its business-class Gold card, and shipped a brand-new travel app built on the Ethereum (ETH +3.65%) blockchain.
There's nothing boring or old-school about American Express, despite its centennial history and Warren Buffett's deep-value stamp of approval. The stock is neither cheap nor too expensive, but it's a no-brainer investment with share prices in the Goldilocks zone. If American Express keeps up its winning ways and next-gen technology development, the premium prices should come later.
NYSE: WMT
Key Data Points
3. Walmart
And if you thought American Express was an unexpected guest on this list, the third name might downright shock you.
Good old Walmart (WMT 1.16%) is evolving before my eyes. The world's largest big-box retailer is borrowing entire chapters from the playbooks of Amazon (AMZN +1.42%) and Costco Wholesale (COST 0.41%), building its own take on e-commerce with a massive physical footprint.
In August's second-quarter report, Walmart's online orders grew 25% year over year. The shipping service is catching up to Amazon Prime's benefits in many ways, providing same-day delivery for paying members of the Walmart+ club. Like Costco's memberships and Amazon Prime's subscriptions, Walmart's customer loyalty program represents a low-cost stream of pure bonus revenue.
Here's one last surprise: Walmart stock comes with a premium price tag today.
The stock trades at 36 times forward earnings estimates, which is a lofty valuation for a business that redefined low-cost retail operations. Investors have noticed that Walmart is up to a whole bunch of new tricks, setting the stock up for great long-term returns. So the rich stock price makes sense, and it's a no-brainer buy right now.
