Blue-chip companies typically have a large market cap, solid financial reputation and overall positive sentiment among investors. These are stocks that shift the market in one direction or the other.
Investing in blue-chip stocks for the long term is a solid investment strategy. Many different mutual funds and ETFs provide exposure to a wide range of blue-chip companies for which they are more heavily weighted. Blue-chip stocks offer consistent growth potential and should comprise a decent amount of investment portfolios.
Below, I discuss three blue-chip stocks that have continued growth opportunities for investors and have all performed better than the S&P 500 and Nasdaq this past year.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is a systems software company that offers a wide range of products and services, including Microsoft 365 subscription, Azure, Windows operating system, Xbox gaming, LinkedIn and IoT.
Over the past year, Microsoft’s share price has appreciated by 27% due to strong earnings growth, especially in cloud-based business and artificial intelligence technology.
On April 25, Microsoft released its earnings for the third quarter of fiscal year 2024, in which it stated that total revenue increased by 17% and net income rose by 20% year-over-year (YOY). Most notably, its intelligent cloud segment saw a 21% increase in revenue within the same period.
Microsoft is set to release its earnings for the fourth quarter of fiscal year 2024 on July 30 after market close. Investors are anticipating roughly a 15% YOY increase in revenue. Profits for Azure and artificial intelligence will be most significant for investors due to its recent partnership with OpenAI.
MSFT is a very solid investment, whether it performs well, referring to its fourth quarter results, or falls short of expectations. Microsoft is still a company on the right track. It offers investors a unique buying opportunity with its recent sell-off, which has affected the tech industry most notably, corresponding with upcoming earnings results.
American Express (AXP)
American Express (NYSE:AXP) is a provider of financial products and services such as credit cards, charge cards and other banking products. Its customer base ranges from individuals to large corporations.
On July 29, American Express reported earnings for the second quarter of 2024, stating that total revenue increased by 9% and net income rose by 39% compared to the previous year. Due to increased consumer spending among its customers, American Express raised its projected earnings per share guidance for the remainder of 2024 to $13.30-$13.80 from $12.65-$13.15. AXP also reported approximately 3.3 million new card acquisitions for the second quarter.
AXP is also experiencing a shift in its customer base. A growing number of Millennial and Gen Z consumers now make up the majority of their card-based revenue. It will be interesting to see how AXP continues to adapt to these changes.
Over the past year, AXP has been one of the major Dow leaders, with its share price increasing by 49%. It is a solid investment for the long term, especially among blue-chip companies.
3M (MMM)
3M (NYSE:MMM) is an industrial company with a range of products and services in its electronics and transport, industrial and consumer segments.
On July 26, 3M released its earnings for the second quarter of 2024, in which it stated that total revenue remained practically unchanged and adjusted earnings per share increased by 39% compared to the prior year. 3M’s outlook was also raised for 2024, in which earnings per share is expected to range from $7.00 to $7.30. Previously, it was between $6.80 and $7.30.
Following this earnings report, which beat analysts’ expectations and raised its outlook for 2024, 3M’s share price surged by 23%, the most significant percentage increase in the stock’s price.
Investors are excited about the future due to this very positive earnings result; without it, MMM has been trading fairly flat over this past year.
It offers investors an opportunity. It’s currently trading at a 52-week high and may continue to grow if its earnings potential is sustained.
As of this writing, Noah Bolton held a LONG position in MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
