Blue chip stocks are what many investors look for when trying to add new stocks to their portfolios. What really are these companies? Well, a blue chip company is generally a well-known and well-established company that has a history of generating consistent profits. They have grown their revenue in the past and have worked to make a successful company. That’s why these are usually more reliable to invest in since they are not small startup companies that just hit the market and carry tons of risk.
Investors really know what they are getting into when investing in these companies. However, many times these companies are overlooked as “obvious choices.” They might even seem like boring stocks to invest in when we see AI stocks and the like flying up. But blue chip stocks can still have plenty of potential. That’s why, in this article, we have done the research and aim to present you with three blue-chip stocks that you shouldn’t ignore.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is a massive technology company with a goal to enable people across the world to work, play, and communicate. Microsoft has exceeded its expected earnings for every quarter of 2023. Analysts estimate that this stock will trade within a one-year range of $298.10-$546.44, with an average of $455.86. Copilot will benefit Microsoft because it increases consumer demand for Microsoft’s products and could potentially enable Microsoft to increase its own productivity and efficiency.
Last year, Microsoft released Copilot, a program that increases consumers’ productivity. Copilot increases creativity through feedback and trends and improves productivity through emptying inboxes and automating tasks. GitHub data has shown that Copilot increased productivity by 88% and decreased the amount of time spent searching for information by 77%.
Microsoft has an EPS of 11.06 and a P/E ratio of 37.55x, compared to the sector average of 29.44x. Microsoft’s net income has increased by 146% over the past five years.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is one of the most talked about companies this year with unparalleled innovation in the field. The company has enabled countless breakthroughs with its advanced AI chip technology and expertise with GPUs. The future of the company is highly debated though, with Yahoo Finance analysts predicting a price range of $410 to $1100, with an average of $670.
The AI market has been rapidly expanding for the past year, with a near 100% growth. This is only going to get larger with Bloomberg Intelligence claiming that the industry could grow at a CAGR of 42% over the next ten years. The good news is that currently, NVIDIA has a staggering 92% market share, a drastic advantage that it will hold on to well into the real AI revolution.
When it comes to financials, NVIDIA to say NVIDIA has excelled is an understatement. When it comes to revenue, it has had a 205% increase in the last year alone. This shows that NVIDIA has no signs of slowing down and these numbers are only going to increase as AI becomes more advanced and more prevalent in our daily lives.
American Express (AXP)
American Express (NYSE:AXP) is one of the world’s biggest financial corporations, mainly known for its credit card offerings. Yahoo Finance analysts currently estimate the stock price to be between $125 and $240, with an average of $205 for the following year. American Express seems to have a decent hold on the credit card market.
Despite increasing inflation and interest rates, consumer spending didn’t seem to have any signs of slowing down last year. This rise particularly benefitted American Express, especially when it comes to revenue and profit. The company’s revenue has increased by 15% in the last year alone. The gross profit followed the same trend with an 11% year-over-year increase. The company’s P/E of 18.69x makes it a relative bargain to its peers in the banking industry, who average a 25.5x P/E. All of these positive attributes make American Exoress a blue-chip stock for every investor to consider buying.
On the date of publication, Ian Hartana and Vayun Chugh did not hold (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.
Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.
