Is Southwest Airlines Stock Outperforming the Nasdaq?

Dallas, Texas-based Southwest Airlines Co. (LUV) is a major U.S. passenger airline that provides scheduled air transportation across the United States and select near-international markets. Valued at a market cap of $17.8 billion, the company also provides in-flight entertainment and connectivity services, and a Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares.

With a market capitalization comfortably between $10 billion and $200 billion, Southwest Airlines qualifies as a “large-cap stock,” reflecting its scale and longstanding presence in the U.S. airline industry. The company’s competitive edge stems from its low-cost, point-to-point model, which enables efficient operations, competitive fares, and frequent service across short- and medium-haul routes. Southwest has also built a distinctive customer proposition around free checked bags, no change fees, and a simplified travel experience, helping set it apart from traditional full-service carriers.

Southwest Airlines has delivered a mixed performance, with recent weakness contrasting with solid longer-term gains. Shares are currently 24.2% below their 52-week high of $55.11, after falling 12.9% over the past three months and trailing the Nasdaq Composite’s ($NASX) 2.3% return during the same time frame.

Moreover, on a YTD basis, shares of LUV are down 1.1%, lagging behind NASX’s 16.7% uptick. However, the longer-term picture is more favorable, with LUV up 28.4% over the past year, edging past the Nasdaq’s 19.8% return. 

More recently, though, the momentum has turned bearish, with shares trading below both their 50-day and 200-day moving averages since last month.

On Sept. 2, Southwest shares rose 2.5% after the airline announced plans to launch its first-ever airport lounge network, marking a major expansion of its customer experience and premium offering. In partnership with Chase, the lounges will combine Southwest’s signature hospitality with premium amenities, locally inspired dining, and travel benefits.

Construction has already begun at four airports, Austin, Baltimore/Washington, Honolulu, and Nashville, with the first lounges expected to open in late 2027. Southwest also plans to add at least seven more lounges across key business and leisure markets, while using the initiative to strengthen its Rapid Rewards loyalty program and 30-year partnership with Chase.

Southwest has fallen behind top rival Delta Air Lines, Inc. (DAL), with the gap particularly pronounced in 2026, with a 38.1% rise over the past 52 weeks and an 18.9% rise on a YTD basis. 

Despite this relative underperformance, analysts maintain a “Moderate Buy” consensus on LUV, with a $50.83 average price target implying 21.7% upside from the current market price.

On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.