I understand why investors want to look for under-the-radar, small-cap picks at times. First, it’s smart to diversify your portfolio, and it’s also incredibly fulfilling (and profitable) to identify and buy into a small company before it hits big. But the anchor of your portfolio should be blue-chip stocks that you can count on for the long haul.
Blue-chip stocks represent well-established companies that are acknowledged leaders in their field. They always have an established history of stable earnings growth and often are reliable sources of dividends.
In uncertain times, blue-chip stocks provide a safe spot for investors. While they may not offer the same level of growth potential as smaller, more volatile stocks, blue-chip stocks tend to be often resilient in a market downturn.
Because blue-chip stocks always have strong balance sheets, they can provide investors with a level of stability and predictability in a way that their smaller counterparts cannot.
We’re using the Portfolio Grader to look for the best blue-chip stocks on the market . Based on factors like earnings performance, revenue growth, momentum and analyst sentiment, these stocks all get “A” and “B” ratings in the Portfolio Grader. Any or all would be a good choice to anchor a portfolio right now.
Nvidia (NVDA)
I’m already looking forward to Nvidia’s (NASDAQ:NVDA) earnings report on May 22. While there are some concerns out there that Nvidia may not match the blowout quarters it recorded in fiscal 2024, I think the fiscal Q1 2025 report will be another tail wind for NVDA stock.
Nvidia sports a market capitalization of over $2 trillion and is the third largest publicly traded company in the world because of its massive position in semiconductors and generative artificial intelligence.
Nvidia has a 90% market share in supplying high-powered graphics processing units that are used by customers making generative AI and machine learning products.
While Nvidia’s abrupt growth in fiscal 2024 presents some challenging comparable numbers, earnings reports from its top customers hint that the semiconductor company should impress analysts and the market once again.
NVDA stock is up 82% this year and gets a well-deserved “A” rating in the Portfolio Grader.
Alphabet (GOOG)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is one of those companies that absolutely screams “blue chip.” It dominates the internet by maintaining a 91% share of global search traffic with its Google search engine.
There is an entire industry dedicated to learning Google’s algorithms and capitalizing on search engine optimization to land coveted positions on the first page of a Google search.
Google search revenue in the first quarter of 2024 was $46.1 billion, or more than half of the company’s total revenue of $80.5 billion. Alphabet saw strong year-over-year growth in Google search, YouTube ads as well as Google Cloud.
GOOG stock jumped to all-time highs after the company reported first-quarter earnings, which were 15% better than a year ago and ahead of analyst consensus of $78.6 billion. Earnings per share was $1.89, beating consensus estimates of $1.51 per share and topping last year’s earnings by 61%.
GOOG stock is up 22% in 2024. It gets an “A” rating in the Portfolio Grader.
Microsoft (MSFT)
You don’t get more blue-chip than Microsoft (NASDAQ:MSFT). The software and cloud company is the biggest company in the world with a market capitalization of more than $3 trillion.
Microsoft’s products include its massive Microsoft 365 suite, which includes Word, Excel, PowerPoint, Outlook, Microsoft Teams, OneNote and OneDrive — all of them essential programs for millions of businesses around the world.
It also played a key role in the public rollout of generative AI — possibly the biggest technological breakthrough of the decade — with its investment and partnership with OpenAI, the company behind ChatGPT.
Microsoft’s involvement with OpenAI allowed it to capitalize on public enthusiasm for generative AI and be among the first to roll it out in its software.
All this is leading to massive profits. Revenue in the fiscal third quarter of 2024 was $61.9 billion, up 17% from a year ago. Income was $21.9 billion and $2.94 per share, both up 20% from the same quarter a year ago.
Microsoft is now using that money to fund even more growth, with plans to invest billions in technology in several regions of Asia.
The strong keep getting stronger. MSFT stock is up 33% this year and gets a “B” rating in the Portfolio Grader.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) is a blue-chip streaming service. While other services emerged over the last few years, Netflix is showing uncommon strength and continues to grow in subscribers and revenue.
The company had a massive turnaround last year when it finally decided to crack down on password sharing.
By instituting an $8 charge to any account that shared its password outside of its home location, Netflix generated millions of additional dollars and paid subscribers.
In the first quarter, Netflix reported revenue of $9.3 billion, up from $8.1 billion a year ago. Income of $2.3 billion and $5.28 per share was much better than the $1.3 billion of income and $2.88 per share Netflix reported in the first quarter of 2023.
Netflix now has 269.9 million subscribers, up 16% from a year ago and up 9.33 million in the last quarter.
NFLX stock is up 25% this year and gets a “B” rating in the Portfolio Grader.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) counts half of the global population as its customers. That’s an amazing reach that is unmatched by any other social media company.
The operator of Facebook, Instagram, Messenger, Threads, and WhatsApp products has nearly four billion monthly active users.
And that leads to the question — can Meta be expected to grow its audience even more? After all, the company went through a stagnant phase in 2022 when it actually contracted its user base.
I don’t see that happening now. The Meta family of products is user-friendly, including a new AI chatbot and AI-assistant software that can create images and animations available on Facebook, Messenger, Instagram and WhatsApp.
Meta is off to a great start in 2024. Earnings for the first quarter were $36.4 billion in revenue, which is up 27% from a year ago. Income was up 117% to $12.3 billion, and earnings per share was up 114% to $4.71.
META stock is up 32% in 2024. It gets an “A” rating in the Portfolio Grader.
Walmart (WMT)
Walmart (NYSE:WMT) has blue-chip stock credentials by being the biggest retailer in the world. The Arkansas-based company has more than 10,800 locations, with a presence in every U.S. state and more than two dozen countries.
Walmart relies on a low-cost strategy by keeping the prices of its own brands low to drive down the prices of national brands that want to be on Walmart’s shelves.
Walmart’s massive footprint is also a key negotiating point in helping Walmart negotiate lower prices with its suppliers.
Earnings for the fourth quarter of fiscal 2024 show how effective the strategy is for long-term growth and profits. Walmart reported revenue of $173.4 billion, up 5.7% from a year ago. Income of $1.7 billion was a 30.4% increase from the same quarter last year.
For fiscal 2025, is projecting additional growth of 4% to 5% in net sales, and an increase in operating income of 3% to 4.5%.
Walmart stock is up 15% in 2024 and gets a “B” rating in the Portfolio Grader.
Oracle (ORCL)
Oracle (NYSE:ORCL) is the world’s biggest database-software company. The Texas firm provides cloud computing, applications, platforms and cloud software. It also sells servers and operating systems.
The company is a key partner for other software companies. For instance, it partners with Microsoft to give customers access to Oracle database services that run on Oracle’s cloud infrastructure and are deployed on Microsoft Azure databases.
It also has a partnership with Palantir Technologies (NASDAQ:PLTR) to provide Palantir’s AI-powered services to commercial clients through Oracle’s cloud.
The company reported revenue of $13.3 billion in the fiscal third quarter of 2024, up 7% from a year ago. Earnings per share of $1.41 was up 16% from a year ago.
ORCL stock is up 10% this year and gets a “B” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in NVDA, PLTR, and MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in NVDA and PLTR. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
