We recently published a list of 10 Most Profitable Blue Chip Stocks to Buy Now. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other most profitable blue chip stocks to buy now.
Blue chip stocks are large, financially stable companies with strong market presence, consistent profitability, and regular dividend payments. They are generally market leaders, with strong business models that are resilient across business cycles. Many blue chip stocks are included in the Dow Index (DJIA), so the index is often considered an indicator of their overall performance. Investors would typically flock to blue chip stocks in times of market volatility, economic uncertainty, or when the economy is in late-stage expansion, as these large-cap companies tend to offer stability and consistent returns versus smaller or riskier companies.
We believe that blue chip stocks, and the constituents of the Dow index in particular, represent a unique blend of the value and size factors, combining the financial stability, earnings consistency, and attractive market valuations typically associated with value stocks, with the scale and market dominance of large-cap companies. This dual exposure enhances their resilience in economic downturns and makes them well-positioned to outperform during recessions, when investors tend to shift towards quality and safer stocks. For reference, the Fama–French Three-Factor Model, introduced in 1993, concludes that incorporating exposure to several favorable factors can further enhance stock returns. In this context, both the value and large size factors outperformed in the last years, and especially year-to-date.
Our research indicates that recession fears and Trump Turmoil are likely to persist and potentially continue to favor the most profitable blue chip stocks over everything else. The US administration appears to be eroding the trust of investors through a plethora of unpredictable and contradictory moves – Trump appeared to soften his stance on the US-China trade war, saying that tariffs on Chinese goods “will not be as high as 145 per cent” and that “it’ll come down substantially, but won’t be zero”. While this represents a good signal at first glance, such actions are very likely to deter the US’s partners from negotiating for tariff exemption, simply because the current administration has become too unpredictable.
Our thoughts are confirmed by the VIX volatility index remaining elevated compared to the long-term trend, while the crude oil price remains in a downtrend, suggesting expectations of weaker industrial demand and a weaker economy. On the consumer side, there are reasons to believe that US consumers are getting more cautious than ever – the employee quits rate, as reported by FRED, declined substantially year-to-date and reached levels comparable to the aftermath of the 2008 financial crisis. When employees are reluctant to quit it means two things: (1) it is tough to get jobs out there, implying that the economy is slowing down, and (2) their expectation about the future becomes more pessimistic, which leads to less willingness to quit and potentially risk difficulties finding a new job. Both these factors mean the consumer spending will likely slow down in the following quarters, further pressuring GDP growth.
The key takeaway for the readers is that the odds of a recession and of a prolonged bear market still persist. In this context, the best hedging strategy would be to hold shares of companies that perform well in bull markets, but at the same time can offer protection against turmoil and recessions. Our belief is that the most profitable blue chip stocks are the best candidates, because they possess the wide moat and strong cash flow capacity to withstand any economic slowdown and even potentially absorb the incremental tariffs.
Our Methodology
To compile our list of most profitable blue chip stocks to buy now, we screened for current and former members of the Dow Jones Industrial Average index and identified companies with the highest net income generated in the latest reported fiscal year. From that group, we picked companies with the highest net profit margin, which suggests sound financial health and excellent cost management. The stocks are ranked in ascending order of their net profit margin as of the most recent quarter. For each stock, we also included the number of hedge funds that own the stock as of Q4 2024, according to Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
NVIDIA Corporation (NASDAQ:NVDA) is renowned for its edge in GPUs and AI platforms. Its primary revenue stems from state-of-the-art data center GPUs like the H100 and Blackwell chips, essential for AI workloads. The company also develops the CUDA software platform, which enables developers to leverage GPU acceleration across various applications. NVDA has become a pivotal player in AI infrastructure, with its GPUs powering major AI models and platforms, and thus ranked 1st on our recent list of 11 Best Innovative Stocks to Buy According to Analysts.
NVIDIA Corporation (NASDAQ:NVDA) reported record financial results for Q4 and fiscal year 2025, with quarterly revenue of $39.3 billion, up 78% YoY, and full year revenue of $130.5 billion, up 114%. The company’s Data Center segment was the primary driver, more than doubling to $115.2 billion for the full year. Demand for AI chips and systems remains extremely strong as customers race to build out AI infrastructure. NVDA successfully ramped production of its new Blackwell architecture, delivering $11 billion in Blackwell revenue in Q4 despite some initial delays.
Looking ahead, NVIDIA Corporation (NASDAQ:NVDA) expects continued strong growth in fiscal 2026, forecasting Q1 revenue of $43 billion. The company sees multiple drivers of AI compute demand, including pre-training of larger multimodal models, post-training techniques like reinforcement learning, and inference scaling for reasoning AI that can require 100x more compute per task. The company is positioning itself to address the full spectrum of AI workloads from cloud to enterprise with its Blackwell platform. While gross margins are expected to dip initially with the Blackwell ramp, management expects them to recover to the mid-70% range later in the fiscal year as manufacturing efficiencies improve. With high margins and a wide technological edge, NVDA is undoubtedly one of the most profitable stocks in the world.
Overall, NVDA ranks 1st on our list of most profitable blue chip stocks to buy now. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
