These 3 Boring Stocks Are Delivering the Dow’s Biggest Wins in 2025
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Caterpillar (CAT) surged 66.3% year to date. Caterpillar now trades at 27x forward earnings as a hybrid cyclical and AI infrastructure play.
Goldman Sachs (GS) rose 49% year to date as M&A volume exceeded $1T. Goldman advised on deals benefiting from economic stability and pro-business policies.
IBM (IBM) gained 40% to record highs near $308. IBM expanded non-GAAP operating margins to 18.6% driven by watsonx AI and Red Hat hybrid cloud adoption.
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As 2025 draws to a close, the Dow Jones Industrial Average (DJIA) is having a superb year, up nearly 13% year to date. While artificial intelligence (AI)-oriented stocks continue to dominate headlines, investors might be surprised to learn that the three stocks leading this venerable index are not pure AI plays.
Because the index is price-weighted — meaning higher priced stocks have more influence over its direction — it has not been its tilt toward tech giants like Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL), which together make up about 15% of the Dow’s weighting, that have led it higher. Rather, the top performers in 2025 are Caterpillar (NYSE:CAT), Goldman Sachs (NYSE:GS), and IBM (NYSE:IBM).
These names have surged on broader economic tailwinds, proving the Dow’s diversified strength beyond just Silicon Valley.
Caterpillar has emerged as the Dow’s undisputed leader in 2025, with shares climbing around 66.3% year to date. This marks a sharp rebound from earlier tariff pressures, driven by robust global demand for construction and mining equipment.
Although the company’s third-quarter results showed lower year-over-year adjusted profits of $4.95 per share on $17.6 billion in sales, the decline was due to higher global tax rates and a one-time tax charge. Sales, though, rose 10%, largely from higher end-user equipment volumes.
A key catalyst has been the U.S. infrastructure push, including federal spending on roads, bridges, and energy projects. Caterpillar’s backlog remains substantial, signaling sustained revenue visibility. Slightly lower interest rates from Federal Reserve cuts have eased financing for big-ticket purchases, boosting orders.
Yet, the real surprise is Caterpillar’s pivot to AI-enabling infrastructure. Partnerships like the November deal with Vertiv (NYSE:VTV) for on-site power and cooling in AI data centers position it as a quiet beneficiary of the tech boom, without relying on chip design. Mining electrification trials, such as battery-electric haul trucks with BHP (NYSE: BHP) and Rio Tinto (NYSE:RIO), tap into the energy transition, expanding its total addressable market.
Analysts now view Caterpillar as a hybrid play, justifying a forward earnings multiple of 27 times. This blend of cyclical recovery and forward-looking bets has propelled it past flashier peers.
Goldman Sachs ranks second among Dow leaders, with its stock up over 49% year to date. The investment bank’s resurgence stems from a rebound in dealmaking, fueled by economic stability and pro-business policies. Third-quarter earnings were $12.25 per share, easily beating estimates, on $15.2 billion in revenue, also topping expectations. Mergers and acquisitions volume saw a significant increase in the quarter, and so far this year Goldman has advised on over $1 trillion in announced M&A volume.
Sustained trading revenues and a healthy growth outlook have been pivotal. Goldman Sachs Research forecasts 5% S&P 500 sales growth, in line with expectations for 3% real GDP growth. The firm’s asset and wealth management arms benefited from higher fees amid market volatility, while equity correlations declined, favoring stock-picking strategies that Goldman advises on. Rate cuts have lowered funding costs, enhancing margins on lending and advisory.
Unlike consumer-focused banks, Goldman’s institutional tilt shields it from retail slowdowns, allowing it to capture upside from corporate optimism. This positioning has driven shares to a new all-time high of $856, underscoring its role in a critical financial sector.
IBM rounds out the trio, delivering a 40% year-to-date gain that has also pushed shares to record closing highs near $308. The legacy tech firm’s turnaround hinges on its software and consulting segments, with third-quarter revenue up 7% to $16.3 billion at constant currency. Non-GAAP operating margins expanded to 18.6%, driven by productivity gains and a richer revenue mix.
Central to this has been the watsonx AI platform and Red Hat integration, boosting bookings and hybrid cloud adoption. Consulting backlog reached $31 billion in the third quarter, fueled by AI transformation projects for cost reduction and modernization. Acquisitions like Apptio and HashiCorp have fortified its IT management and automation offerings.
IBM has emerged as a major quantum computing stock, benefiting from breakthroughs such as the Nighthawk processor and Advanced Micro Devices (NASDAQ:AMD) partnerships, while the Digital Asset Haven for tokenized assets eyes a $16 trillion opportunity by 2030.
Under CEO Arvind Krishna, IBM has consistently beaten expectations, raising full-year guidance to 5% growth and $14 billion in free cash flow. This execution has doubled the stock from 2022 lows, validating its premium valuation at 36 times earnings.
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