Only some investing methods can compare to blue-chip equities’ long-term stability and potential profits. Here is an examination of the outstanding growth potential and resilience provided by three of the top blue chip stocks to buy and hold.
Investors seeking steady, long-term financial returns in volatile markets must know which blue-chip stocks to buy and hold. Purchasing high-quality stocks is important since these businesses are known for their stability, sound financial standing and track records of steady development. They frequently hold a dominant position in their particular markets, offering investors some security and the assurance of steady returns.
Here, specific moats of the companies are explored, such as having a solid lead in AI and global infrastructure, constant innovation in consumer technology and strong financial lead and strategic credit performance. These businesses have several things in common that make them great investments for lifetimes.
Alphabet (GOOG, GOOGL)
With a focus on AI, cloud computing and online advertising, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Google’s parent company, has a global lead in technology. Creating and applying cutting-edge AI models like Gemini 1.5 Pro mark a whole new level. This exhibits notable improvements in the speed of the large-scale foundation model. Now, in their fifth iteration, custom Tensor Processing Units (TPUs) dramatically improve AI model deployment and training. Thus, over the last 18 months, they have seen efficiency gains more than 100 times higher.
Moreover, with $12 billion invested in Q1 2024 alone, Alphabet made significant CapEx in tech infrastructure to preserve and enhance its AI capabilities. Fifteen products operate in over 100 countries, and six have over 500 million monthly users. This sizable user base offers a substantial foundation for introducing and expanding new services and features. With 3 billion devices running Android worldwide, the platform’s broad use improves Alphabet’s ecosystem by enabling the easy integration of new cloud and AI services.
Overall, given its track record of innovation, large infrastructure expenditures and broad product uptake, it is a strong contender for the blue-chip stocks to buy and hold list.
Apple (AAPL)
Apple (NASDAQ:AAPL) is the market leader in consumer electronics and is well-known for its iPads, laptops and famous iPhones. Q2 2024’s iPhone revenue was $46 billion, a 10% year-over-year (YoY) decrease. However, the $5 billion one-time effect from inventory replenishment the year before puts this drop in perspective. If this were taken into account, iPhone revenue would be almost unchanged. This underscores the fundamental stability of the market demand for the iPhone.
Moreover, the growth in vital regions like mainland China reflects strong product acceptability and market penetration. Thus, the iPhone 15 and iPhone 15 Pro Max were the best-selling smartphones in urban China.
Further, the laptop segment generated $7.5 billion, up 4% YoY. The main driver of this rise was the successful introduction of new MacBook Air models running on the M3 processor. Hence, the robustness of Apple’s Mac range highlights the company’s capacity for innovation and meeting professional and consumer market demand.
To sum up, Apple is a mainstay in blue chip stocks for buying and holding portfolios because of its constant income streams, persistent customer devotion and unrelenting pursuit of innovation.
JPMorgan (JPM)
JPMorgan (NYSE:JPM) is a massive global financial company that provides various banking, investing, and asset management services. The company’s top-line growth is vital, reflecting the outstanding performance in underwriting fees in Q1 2024. This led to an 18% YoY increase in firmwide investment banking fees.
Additionally, the company’s top-line of $40.9 billion rose 4% YoY, $1.5 billion, excluding the First Republic (OTCMKTS:FRCB). Further, net interest income (NII) ex-markets increased by $736 million (+4% YoY). This is based on a better balance sheet composition and higher interest rates, partially offsetting the compression of the deposit margin.
Further, the other cornerstone of JPMorgan’s lead is its credit performance. With net charge-offs of $2 billion and a net reserve release of $38 million, the company recorded credit costs of $1.9 billion. Although manageable, the rise in net charge-offs, especially in the card category, highlights a normalization trend. Lastly, Card was primarily responsible for the $45 million net reserve increase, demonstrating sound risk management techniques.
As of this writing, Yiannis Zourmpanos held a long position in GOOG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.