In the world of investing, blue-chip stocks hold a prestigious position that only a few companies can achieve. They represent the presence of large, well-established and financially sound corporations that are often recognized as industry leaders.
These companies boast decades of track records of delivering value to shareholders through dependable earnings and returning cash to shareholders. Blue chips are generally considered less risky investments than their smaller and less established counterparts. This makes them a popular choice for investors who seek to build a well-diversified investment portfolio.
Now, let’s discover the three best blue-chip stocks to buy in 2024.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is undoubtedly one of the best blue-chip stocks to buy in 2024. They just recently surpassed the $3 trillion market capitalization status, and AI will be a huge growth driver for the company over the next decade.
Generative artificial intelligence (AI) is one of the most important computer technologies since the birth of the internet. The largest companies in the world are looking to cash in on this lucrative trend, and Microsoft is at the forefront of driving innovation in this burgeoning sector. Their cloud computing arm, Microsoft Azure, will play a pivotal role in accelerating generative AI services. Moreover, its AI-powered copilot software will accelerate customer productivity across its diverse product suite.
In the second quarter of FY24, Microsoft’s revenue increased 18% YOY to $62.02 billion. EPS skyrocketed 33% to $2.93 per share as the company infused AI across its entire technology stack. However, the prime growth driver was their cloud services, which grew 20% YOY to $25.9 billion. The company continues to see strong growth across all business segments, and 2024 is truly just the beginning.
Berkshire Hathaway (BRK-A, BRK-B)
Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), led by legendary investor Warren Buffett, is a multinational powerhouse encompassing a wide range of businesses across various industries. They’re known as a conglomerate, which is a diversified holding company structure.
Given its robust holdings and safety structure, Berkshire Hathaway is synonymous with the “blue-chip” phenomenon. They have a strong track record of outpacing the market, although returns have stagnated in the last decade. Their long-term value investing approach has contributed greatly to their success. Warren Buffett is patient in his approach to investing and doesn’t follow the crowd, often scooping up shares of companies trading below their intrinsic value.
In recent years, Buffett has been stockpiling cash despite improving the economy’s financial conditions. His record cash pile of $157 billion suggests valuations may not be as attractive as the market believes. However, this doesn’t mean opportunities are nonexistent, as stocks are always mispriced in any macroeconomic environment. With global debt at concerning levels, Berkshire Hathaway is a great safe haven bid in times of turmoil.
JPMorgan Chase (JPM)
JPMorgan Chase (NYSE:JPM) is an American financial institution and the largest bank in the United States. This prominent position makes them a significant player in the global economy, influencing everything from consumer banking, commercial banking and international trade finance.
JPMorgan Chase caters to consumers, businesses and institutions, offering a wide range of products and services. This includes commercial banking, investment banking and asset management. Their vast clientele makes them a one-stop shop for diverse financial needs. However, the strength of their liquidity over the last 18 months makes the stock even more compelling.
JPMorgan largely benefitted from the regional banking crisis and higher interest rates through 2023. They made advantageous moves, including acquiring First Republic’s consumer loan assets for pennies on the dollar. In the 2023 fiscal year, net interest income increased 19% YOY to $24.2 billion. Their liquidity is the strongest in the company’s history, with approximately $1.4 trillion in cash and marketable securities. With a P/E of just 11.4, JPM remains one of the top blue-chip stocks to snap up for the long term.
On the date of publication, Terel Miles 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.
