Investing in blue-chip stocks is not about chasing the high-octane growth of the tech sphere or speculative plays but about building a resilient portfolio offering long-term stability. With their robust balance sheets, timeless products, and a legacy of solidity, blue-chip stocks have long been the emblem of reliability. Therefore, the concept of blue-chip stocks to buy on the dip remains a fundamental investment approach grounded in trust.
Unlike venturing into speculative territories, wagering on blue-chip stocks provides a comforting assurance. Moreover, the strong institutional backing typically associated with these heavyweights puts constructive pressure on the leadership to prioritize shareholders’ interests, further cementing their appeal to buy-the-dip candidates.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is a true tech behemoth that continues to be a compelling narrative in the investment sphere. It has its tentacles spread across a variety of verticals, and the tech giant has meticulously woven artificial intelligence (AI) into its corporate ethos, underscored by its massive $13 billion investment in OpenAI. Its investments in AI are a strategic maneuver enhancing its cloud services, notably Azure, which recently delivered a 24% year-over-year (YOY) bump in sales. The AI infusion, coupled with Azure’s burgeoning demand, provides a robust synergy fueling Microsoft’s cloud dominion.
Furthermore, its net income leaped by 27% YOY in the first quarter of fiscal 2024, delivering an EPS of $2.29. The announcement of a 75-cent quarterly dividend adds a cherry on top, melding growth with shareholder returns. Additionally, with a price return of 44% year-to-date (YTD) and a staggering 227% over the last five years, Microsoft’s journey isn’t just about riding the tech wave, but ensuring its stakeholders are along for this lucrative ride.
Alphabet (GOOG,GOOGL)
Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) is the parent entity of Google and has remained a veritable money magnet since its initial public offering almost two decades ago. Moreover, with its DeepMind technology leading the AI charge, Alphabet is not just a participant in the AI revolution; it’s on the path to monetizing these innovations, promising to catapult its long-term trajectory.
The stock has recorded more than a 50% gain YTD, building on a five-year rally exceeding 150%. Likewise, Alphabet’s financial engine is turbocharged by its advertising revenue and its burgeoning cloud services, which contributed $8.4 billion in the last quarter alone. The firm’s net income and revenue swelled by 41.5% and 11% YOY in the third quarter, respectively, with analysts eyeing an even more impressive revenue upswing.
Furthermore, with Alphabet sitting on a war chest of $118 billion and minimal debt, it is strategically positioned to exploit the high-interest-rate environment, pursue meaningful acquisitions, and reinforce its financial positioning.
Tesla (TSLA)
Tesla‘s (NASDAQ:TSLA) recent quarterly figures may not have charged up the market’s enthusiasm. However, it still continues to dominate the world stage with a valuation exceeding the $600 billion mark. Undeterred, the EV pioneer clings on to its ambitious goal of rolling out 1.8 million vehicles by the conclusion of this year, a testament to its tenacity amidst economic headwinds.
At the helm, Elon Musk issued a note of prudence amidst the economic turbulence, shifting gears to prioritize affordability in Tesla’s roadmap effectively. Consequently, its shares have dipped more than 15% this month, creating an excellent scenario for investors looking at blue-chip stocks to buy on the dip.
Moreover, Tesla is gearing up to essentially revolutionize the market anew with its Cybertruck, a marvel of design that continues to resonate with the market. Additionally, this bold foray is anticipated to cement Tesla’s stronghold in the EV realm, and investors hitching a ride with TSA stock now are likely to reap the rewards of the post-Cybertruck surge.
Visa (V)
Visa (NYSE:V), a juggernaut in the credit card sector, once again demonstrated its financial prowess, churning out a stellar $4.7 billion in GAAP net income on sales of $8.6 billion in the fiscal fourth quarter report. This performance translates into a breathtaking net profit margin of 54.7%, showcasing the company’s ability to turn revenue into profit with impeccable efficiency.
Amidst talk of stable payment volumes, Visa hasn’t shied away from rewarding its shareholders, earmarking a massive $5 billion for share repurchases and declaring $16.1 billion in dividends. On top of that, it has also approved a $25 billion multi-year share repurchase program.
Despite the shadow cast by potential dips in consumer spending, Visa’s horizon gleams with tremendous promise for those with wide-ranging views. Also, the company’s bold foray into the future involves a $100 million generative AI venture fund, ushering in the future of commerce and payment technologies.
Coca-Cola (KO)
Coca-Cola (NYSE:KO), the storied soft drink giant, sweetened the pot recently with its robust third quarter results, outperforming Wall Street’s estimates. The company fizzed past expectations, delivering an EPS of 71 cents, topping the 69 cents forecast. Its revenue swelled to a whopping $11.91 billion, an impressive 8% surge from the previous year, and notably ahead of the $11.44 billion analysts had bubbled up in their projections.
Furthermore, Coca-Cola has now elevated its full-year forecast, projecting a sparkling 7% to 8% EPS growth, a solid bump from its previously stated 5% to 6% target. Its revenue outlook also got a shot of optimism, with the management expecting a 10% to 11% climb, up from the prior 8% to 9% estimate. With KO stock down double-digits YTD, it could be a prime long-term investment opportunity, especially with the company’s 3.3% yield on its 46-cent quarterly dividend.
American Express (AXP)
American Express (NYSE:AXP) investors were dealt a winning hand with its third quarter results, trumping expectations with a hefty 13% YOY increase in revenue to $15.38 billion. The financial maestro not only outperformed the analysts’ revenue targets but also took things up a notch on earnings, delivering in at $3.30 per share against a projected $2.94.
The credit card behemoth highlighted that consumer spending remains resilient, and with credit quality outshining pre-pandemic levels, its outlook remains promising. In the wake of these results, AXP’s stock, which has seen an 8% dip over the past six months, presents a compelling buy with a forward price-earnings ratio of just 13, positioning it as a standout contender among blue-chip stocks to buy on the dip. Also, AXP stands as a top Warren Buffett stock as Berkshire’s fourth-largest equity holding, making up 6.6% of its portfolio.
Amazon (AMZN)
Last on the list of blue-chip stocks to buy on the dip is Amazon (NASDAQ:AMZN), which recently delivered a knockout punch to its skeptics, unveiling its most robust quarterly performance since the pandemic. Efforts to trim the fat paid off, with the tech titan notching an EPS of 94 cents, shattering the consensus estimate of 58 cents with aplomb. Its third quarter sales also raised eyebrows, clocking in at a whopping $143.1 billion, significantly ahead of the $141.4 billion analyst estimates.
Furthermore, the cloud-computing arm, Amazon Web Services (AWS), held its ground with sales of $23.1 billion, narrowly missing forecasts. Simultaneously, advertising sales surged to $12.1 billion, defying expectations. Moreover, in the third quarter, Amazon reported significant gains following its highly successful July Prime Day, setting the stage for a global hiring spree aimed at onboarding 250,000 new employees. Additionally, cost-cutting measures earlier in the year contributed to improved profit margins, with a reported third quarter operating margin of 7.8%, marking the highest level in two years.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
