Investors look for equities with the potential for rapid returns in their pursuit of profitable investments. Several blue-chip stocks are expected to continue to perform well, providing a mix of both cash flow stability and long-term growth.
These top players in the field, who offer stability and growth, cover sectors ranging from digital technology to pharmaceuticals. Businesses with large user bases and leadership in digital payment get more growth through technology utilization and strategic relationships.
Even with the market’s record highs and year-long rise, it’s getting harder to sniff out undervalued blue-chip stocks. High valuations carry a danger of sudden price dips. Still, certain undervalued blue chip stocks open doors to stability and reliable returns.
Every investor should own these three blue chips and be open to great opportunities.
Apple (AAPL)
We once knew it to be the world’s most valuable company.
However, since giving up its crown Apple (NASDAQ:AAPL) shareholders may not need to worry. The company’s weak performance this year may be concerning, as revenue continues to decline despite still sky-high revenues. As analysis shows, it is noted that the price targets go from $158.00 to $250.00 with a $201.41 mean.
However, light appears on the horizon for long-term investors. Recently, AAPL surged higher after the company reportedly bought Canadian AI startup DarwinAI. This deal highlights the company’s focus on this space, and that its AI initiatives are beginning to roll. In early 2024, Apple integrated the DarwinAI team, with Apple’s CEO hinting at future advancements in AI. This happened despite the company trailing behind rivals like Microsoft and Google.
Further, Apple dropped plans for electric cars and turned its attention toward generative AI, teasing a big AI reveal. Apple’s stock is still cheaper than competitors like Amazon and Tesla, with a healthy gross margin of about 45%, at 26-times forward profits.
Meta Platforms (META)
Starting as Facebook, Meta Platforms (NASDAQ:META) has become a top player in technology, especially in virtual reality (VR) stocks. Known for its Rift and Quest VR headsets, Meta’s Oculus divisions led immersive gaming experiences with a transition to the metaverse.
The rise of Reels brings out Meta Platforms’ rule on social media. Its ad impressions increased by 28% in 2023 year over year (YOY). Temu, owned by PDD in China, became Meta’s biggest advertiser, spending around $2 billion on ads. In light of Meta’s dividend buzz, the change shows PDD’s intention to expand Temu in the U.S.
Additionally, experts believe that fiscal 2024 revenue will surpass $158.2 billion, a 17.3% boost from the last year. Also, they anticipate 2025 sales to cross $178 billion. With a $528.80 price target, experts rank its shares a strong buy, putting Meta with the top dogs of VR stocks.
Berkshire Hathaway (BRK-B)
Warren Buffet’s $364 billion Berkshire Hathaway (NYSE:BRK-B) portfolio, which includes Apple and other blue-chip stocks, continues to attract investors looking for stock inspiration. Apple controls 43% of the portfolio, and Buffet reaps the rewards from his initial 2016 investment. Additionally, this led to a 374% skyrocket in the stock by March 8.
Berkshire Hathaway, unlike IT firms solely focused on AI and data, has experienced growth thanks to its varied sectoral investments. Diversity locks in stability and facilitates strategic capital adjustments. And Buffet’s seasoned experience raises Berkshire’s appeal, providing a sanctuary during market volatility.
The company’s Q4 operating income grew 28% to $8.48 billion, boosted by a 28% increase in buybacks, expected to total $2.2 billion. Barron’s listed BRK-B with its top ten picks, believing after-tax operating products to shoot through $40 billion in 2024. I tend to agree that this is a stock worth owning for the long-term, among several reasons.
On the date of publication, Chris MacDonald 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.
