I’ll always advocate for blue-chip stocks as an ideal holding to anchor an investment portfolio. Blue chips provide many benefits that you won’t find elsewhere in the market. But when you’re looking for some names to fit the bill, it’s important to focus on top-rated blue-chip stocks that will give you a better chance for success.
Blue-chip stocks represent companies that are well-established, financially sound, and at the top of their respective industries. When you’re investing in blue-chip stocks, you can usually rely on the companies to provide consistent earnings and a solid financial base. Many blue-chip stocks also pay a reliable dividend as well.
I also like the growth potential offered by top-rated blue-chip stocks. While it’s more difficult to substantially grow a business that’s already sporting a large market cap and is at the top of the field, it’s certainly possible.
Top-rated blue-chip stocks can sometimes offer the same dynamic growth that you can find in smaller companies that are favored by investors seeking growth.
We’re using the Portfolio Grader to screen for and identify the best top-rated blue-chip stocks in the market.
The Portfolio Grader evaluates stocks based on a variety of factors such as earnings performance, growth, analyst sentiment and momentum to calculate an “A” through “F” grade. All the names on this list score a coveted “A” rating, meaning that they are the best of the best when it comes to blue-chip names.
Adding one or more of these top-rated blue-chip stocks will give you a solid foundation for your portfolio that balances risk and reward to help you achieve your financial goals.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) breaks all the rules – despite a market capitalization of more than $3 trillion, Nvidia still shows all the characteristics of a dynamic growth stock, thanks to its industry-leading position with generative artificial intelligence.
Estimates are that Nvidia provides anywhere from 80% to 90% of the high-powered graphics processing units needed to run the most advanced generative AI programs.
As these GPUs cost tens of thousands of dollars apiece, Nvidia’s profits have been soaring ever since companies realized that AI offerings are a must-have for any tech company.
That’s how the company was able to show year-over-year revenue growth of 262% in the first quarter of fiscal 2025, coming in at $26.04 billion. Operating income was $16.9 billion, up 690% from a year ago, and earnings per share of $5.98 was up 629% from the first quarter of fiscal 2024.
BlackRock Investment Institute strategist Wei Li believes that investments in AI data centers to increase 60% to 100% in the coming years, giving Nvidia plenty of room for continued growth. While there may be some short-sellers who believe Nvidia’s runway is short, I’m betting on NVDA to continue to expand.
NVDA stock is up 155% this year and gets an “A” rating in the Portfolio Grader.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has a dynamic growth story of its own. The company’s Google search engine has a near monopoly on global search traffic with an estimated 91%, giving it unmatched potential to capture the lucrative online advertising market.
Google search brought in $46.1 billion in revenue in the first quarter, up from $40.3 billion a year ago. Alphabet also saw strong growth in YouTube advertising ($8.09 billion, up from $6.63 billion a year ago). For the quarter, Google advertising accounted for $61.6 billion of the company’s $80.5 billion in revenue.
Take note, however, that Alphabet has pulled out of its discussed acquisition of HubSpot (NYSE:HUBS) – a deal that, had it been complete, would have helped Alphabet increase its business software revenue and cloud revenue. But notably investors haven’t punished GOOG stock for the failure of that venture.
Considering that Alphabet has more than $108 billion in cash on hand, it shouldn’t have any trouble finding another partner should it want to grow the business through an acquisition. It just needs to find the right deal that makes sense for shareholders – obviously, the HubSpot deal wasn’t it.
GOOG stock is up 31% this year. It gets an “A” rating in the Portfolio Grader.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is another Big Tech company that is using its advertising power to bring in billions in revenue each quarter. While Alphabet has a near-monopoly with internet search, Meta Platforms has a dominant social media presence and reams of information about its users that lets advertisers target messages to specific audiences.
Meta reported that 3.24 billion people on average used its products in the first quarter, up 7% from a year ago. As advertising impressions increased by 20% from a year ago and the average price per ad was up 6%, Meta Platforms saw a huge 27% increase in revenue, bringing in $36.4 billion versus $28.6 billion a year ago.
Meta also offers Meta AI, its generative AI-powered assistant, which can help people create and modify projects and images on the company’s Facebook, Instagram, WhatsApp and Messenger platforms.
META stock is up 39% this year and gets an “A” rating in the Portfolio Grader.
International Business Machines (IBM)
International Business Machines (NYSE:IBM) has been called Big Blue since the 1980s, a tribute to its blue color scheme on signs and on the company’s displays and cases in the 20th century. But I think it could better be called “Big Blue Chip” based on its track record of being one of the best blue-chip stocks you can buy for generations.
IBM traces its history back for generations, all the way to punch-card based data processing machines in the 1880s. It was responsible for the first electronic computer, launched in 1943, and the first personal computer in 1981.
Today, Big Blue offers the Watson AI engine and the Watsonx generative AI platform to its enterprise customers. It’s one of the top cloud infrastructure providers in the world.
Earnings in the first quarter earnings included revenue of $14.5 billion, up 1% from a year ago. Net income was $1.6 billion, up 69%. And earnings per share of $1.69 was up 66% from the first quarter of 2023.
IBM stock is up 13% this year and gets an “A” rating in the Portfolio Grader.
Dell Technologies (DELL)
Dell Technologies (NYSE:DELL) is another legacy tech company that is finding new ways to compete in the 21st century. Dell is best known as a manufacturer of computers, laptops and mobile devices, but the company is also working in AI by operating a large server business that allows companies to upgrade their hardware to run AI applications.
Dell is expected to be a major player in the AI space for years to come. It’s building and selling servers that include Nvidia’s highly prized H100 GPU and Blackwell-generation chips. Dell’s backlog of orders for its AI servers increased 30% during the first quarter to $3.8 billion. AI server sales rose 42% to $5.5 billion.
Dell is also working with Nvidia and Elon Musk’s xAI artificial intelligence company to build xAI’s supercomputer and power the Grok chatbot.
Dell’s AI offerings will be a catalyst for many quarters to come. The stock is up 75% this year and gets an “A” rating in the Portfolio Grader.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) is perhaps the best streaming service on the planet. Only Alphabet’s YouTube, which offers free streaming, has a greater reach than Netflix.
“We have built a hard to replicate combination of a strong slate, superior recommendations, broad reach and intense fandom, which drives healthy engagement on Netflix,” the company said in its first-quarter earnings report. “Improvement in these key areas is the best way to delight our members and continue to grow our business.”
Netflix is reporting Q2 earnings after the closing bell on July 18. Investors should be looking for revenue growth (up 15.9% in the first quarter from a year ago), global streaming paid memberships (up 16% in Q1) and global streaming paid net additions (up 9.3%).
If Netflix can continue to show improvement on those numbers, thanks to its relatively new strategy to end password sharing, then Netflix stock will continue its ascent.
NFLX stock is up 34% this year and gets an “A” rating in the Portfolio Grader.
Walmart (WMT)
Walmart (NYSE:WMT) is the biggest retailer on the planet, boasting more than 10,800 locations that includes every U.S. state and two dozen countries.
I also appreciate that Walmart is aggressively growing its e-commerce business. Considering its footprint, why pay another company to ship and deliver its goods to customers who want to order online when there’s business there ripe for the taking? It’s better for Walmart to do it itself.
Walmart also is investing heavily in drone delivery. Since launching drone delivery in 2021, the company has completed more than 30,000 unmanned deliveries.
Walmart is also working on bridging the drone service, where available, with the Walmart app – customers who order online will be notified if they are eligible for drone delivery. While there are still regulatory hurdles to clear, I appreciate that Walmart is looking for avenues forward to make the company more profitable.
WMT stock is up 33% this year and gets an “A” rating in the Portfolio Grader.
— Louis Navellier and the Investor Place Research Staff
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Source: Investor Place