Looking for the best blue-chip stocks to buy might seem boring, especially compared to stocks that make big moves.
In fortifying your investment portfolio, dipping your toes into the volatile waters of penny and small-cap stocks can be incredibly tempting. However, a seasoned investor would know the unmistakable value of anchoring a portfolio with top-tier blue-chip stocks to buy.
These titans represent businesses boasting both dominant market positions and enviable competitive advantages. These aren’t just large corporations; they’re the cream of the crop, commanding a market capitalization north of $10 billion.
Often, the reputation of blue-chip stocks is crafted on the bedrock of product excellence and unshakeable investor confidence in its mission and leadership.
Many of these blue-chip stocks to buy discussed in the article are currently undervalued due to fleeting external factors. This presents an intriguing window of opportunity, especially when we glimpse emerging catalysts.
With that said, let’s dive in and unearth these gems together.
Alphabet (GOOG, GOOGL)
GOOG stock: letters spelling out google
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Harnessing the power of its search engine, tech behemoth Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is one of the biggest tech giants in the world, steadily widening its footprint in the burgeoning realms of cloud computing, AI, and autonomous vehicles.
Beyond its core, it’s focused its efforts on cementing its position as a juggernaut in the artificial intelligence (AI) sphere. In doing so, it recently unveiled Gemini, a large language model set to rival OpenAI’s ChatGPT.
As Alphabet delves deeper into AI, the revelation of an enhanced Bard chatbot and its integration with Google’s comprehensive suite of tools, including the likes of YouTube and Google Drive, could add new layers to Alphabet’s growth story.
The revamped Bard is designed to be a versatile companion, aiding users in a variety of tasks, such as drafting notes and planning trips, while also flaunting multilingual communication and advanced fact-checking capabilities.
Riding on these innovations, it’s hardly a surprise that GOOGL stock has swelled by a robust 45.9% year-to-date, reflecting the market’s upbeat sentiment towards Alphabet’s flourishing diversification and technological advancements.
McDonald’s (MCD)
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For those scouting for the best picks in the restaurant industry, McDonald’s (NYSE:MCD) effortlessly wears the crown.
This fast-food behemoth has pioneered a consistent and replicable customer experience across its outlets, ensuring its patrons enjoy the same quality and ambiance in virtually every part of the world. From its humble beginnings, it now boasts a portfolio of more than 38,000 locations across 100 countries.
The company’s financial prowess is evident in its recent report, with a 14% surge in second quarter sales, amassing $6.47 billion, and a staggering 94% leap in net income from the previous year, totaling $2.31 billion.
McDonald’s sweetens the deal for investors with its dividend offering, currently yielding a tad over 2%. Recent revelations indicate the company’s strategic move to raise its royalty fees from 4% to 5% for new U.S. franchisees.
This step aims to sharpen McDonald’s competitive positioning and top-line performance. MCG is one of the perennially reliable blue-chip stocks to buy.
Apple (AAPL)
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Apple (NASDAQ:AAPL) boasts the title of the world’s most valuable company, with a colossal market cap north of $2.7 trillion, and remains a titan in the tech universe.
Despite experiencing a modest 1% decline in its recent quarter’s revenue because of a tepid consumer spending environment, it’s imperative to look beyond the surface.
Apple’s services revenue, a growing pillar of its business model, witnessed an 8% surge year-over-year. Coupled with this is the impressive profit uptick to $19.8 billion.
Apple’s array of new products, spearheaded by the latest iPhone, is anticipated to capture growing demand as the holiday season unfolds.
Triggered by Morgan Stanley’s recent report, AAPL stock is on an uptrend, reflecting the iPhone 15’s burgeoning demand.
After achieving record lead times in North America, the device’s potential has been incredible, especially given its initially subdued reception.
Echoing this sentiment, Dan Ives, a seasoned analyst from Wedbush Securities, projects a bullish trajectory for AAPL, forecasting a climb to $240 per share this year. That makes it one of the more intriguing blue-chip stocks to buy.
Netflix (NFLX)
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Shares of streaming pioneer Netflix (NASDAQ:NFLX) are down almost 9% this month following the comments of its CFO, Spence Neumann, regarding the limited immediate revenue from its ad tier.
As the global shift leans more towards streaming, Netflix finds itself in an incredibly helpful position. With competitors grappling with waning traditional TV metrics, Netflix’s primary challenge is in amplifying its streaming market share.
Despite raking in a massive trailing twelve-month revenue of over $32 billion, there’s immense growth potential on the horizon.
Given the staggering total addressable market size exceeding $500 billion and the promising growth trajectory of ad revenues, Netflix remains a compelling proposition. Diving into the numbers, Netflix’s financial health is radiant.
Boasting a free cash flow of $18 billion over the past year, it reigns as the most lucrative in its niche. With a current average price target of $474.2 from TipRanks analysts, the stock shows potential for an upside exceeding 25%. NFLX is the best of the streaming blue-chip stocks to buy.
Starbucks (SBUX)
Learnin' From Luckin, Starbucks Stock Heats Up a Strategy
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March ushered in a significant leadership transition for Starbucks (NASDAQ:SBUX), with its iconic leader, Howard Schultz, stepping down and passing the baton to Laxman Narasimhan.
Schultz’s tenure was transformative, where he effectively combatted the winds of unionization and spearheaded a rebranding that accentuated the restaurant giant’s global presence.
While the challenges are inherent in its niche, Starbucks continually demonstrates resilience and adaptability. The brand faced a considerable setback in China during the pandemic, but the latest figures are illuminating.
As we approach 2024, Starbucks’ rebound in China, its second-largest market, is nothing short of remarkable. The third quarter report showed a robust 46% same-store sales growth post-pandemic.
As for its financial muscle, the Seattle-based giant boasts a YOY growth rate of 9.5%, with projections skyrocketing to 11%.
To further sweeten the pot for investors, Starbucks offers a delectable dividend with a 2.46% yield, underpinned by 12 consecutive years of growth.
Nvidia (NVDA)
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Diving into the realms of innovative technology, Nvidia (NASDAQ:NVDA) shines as a major contender, particularly in the exhilarating realm of AI.
Unlike many businesses that tentatively explore AI, Nvidia is leaps and bounds ahead, showcasing tremendous prowess and expertise.
Given that we’re still scratching the surface of what the technology can truly offer, Nvidia’s accomplishments underscore its critical role in any forward-thinking investor’s portfolio.
The voracious demand for its AI training and inference chips continues to expand its growth potential. HGX systems, integral to powering vast language models and generative AI, find themselves effectively integrated across all major cloud platforms.
Analysts from Citigroup expect Nvidia clinching over 90% of the AI chip market share, a testament to NVDA stock’s meteoric ascent.
United Airlines (UAL)
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United Airlines (NASDAQ:UAL) emerges as a notable exception to its peers adjusting their earnings outlook downwards for the third quarter.
While not immune to the challenges of escalating fuel prices, United stands tall as the world’s fourth-largest carrier, poised to capitalize on potential market share gains.
A key factor steering this optimism is its expansive network, reaching over 120 international destinations, and with international travel maintaining a robust demand, the airliner is in an attractive position.
Despite grappling with industry-wide concerns such as the scarcity of pilots and air traffic controllers, United continues on its trajectory of fleet expansion.
Its second quarter saw a promising 17% revenue hike, touching $14.2 billion and an income of $1.08 billion, translating to $5.03 per share. The airliner reported an average of more than 2,400 flights per day in the quarter.
United’s upward revision of its full-year guidance, forecasting earnings per share between $11 to $12, instills additional confidence.
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
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
