Investing in blue-chip stocks is always a good idea. They might not show an immediate upside but do have the potential to navigate through the market turmoil and come out strong. However, not all stocks are made the same and you need a careful eye to figure out the best blue-chip stocks to buy. The economy is finally improving and the S&P 500 breached 5,300 for the first time after a cooler-than-expected inflation report.
A rate cut could be on the way and if you want to rebalance your portfolio with blue-chip stocks that have strong buy ratings, now is the right time to do so. These stocks have proved their strength in the industry and recently reported impressive quarterly numbers. Several analysts have strong buy ratings making them hot picks right now. Let’s dive deep into them.
Blue-Chip Stocks to Buy: Amazon (AMZN)
A top blue-chip stock, Amazon (NASDAQ:AMZN) has a strong buy rating from a total of 41 analysts. Currently trading for $183 and up 22% year-to-date, the stock has a price target of $220, a 19% upside potential. The e-commerce giant reported strong fundamentals driven by its cloud segment Amazon Web Services (AWS), and the thriving advertising segment.
Analysts were impressed with the first-quarter results and are expecting higher advertising and cloud computing revenue in the coming quarters. The company has been using artificial intelligence for a long time now and the management expects the demand for AI to boost the cloud computing revenue throughout the year.
It has also invested $4 billion in AI startup Anthropic which is the maker of Calude 3, a ChatGPT competitor. Besides the cloud segment, Amazon’s e-commerce business continues to dominate the industry. Its future is bright and the company has a solid track record of performance. No wonder analysts love the stock!
Nvidia (NVDA)
A leader in the AI industry, Nvidia (NASDAQ:NVDA) is already wearing the crown but there is a lot more to come. With the growing adoption of AI in industries, the demand for AI chips will be on the rise and this is where Nvidia will continue to benefit. The company is holding the largest market share and no competitor has been able to come close to it.
40 analysts have a strong buy rating for the stock with a price target of $1,026, an 8% upside from the current level. Industry experts believe that the stock will rally after the company announces results on May 22 and recommend buying before the earnings.
NVDA stock is trading at $943 today and is up 95% YTD. The stock hasn’t been able to hit $1,000 but I believe the upcoming results will give it a boost. Nvidia is the biggest provider of chips for large-language models used for AI chatbots. The AI market is only going to expand and Nvidia will be the first one to benefit.
Meta Platforms (META)
Up 36% YTD, Meta Platforms (NASDAQ:META) is exchanging hands for $473 and the stock has a strong buy rating from 36 analysts. The stock has an average price target of $522, up 10% from the current level.
Meta reported strong fundamentals with an EPS of $4.71 and a net income of $12.37 billion, more than double from the same period prior year. The revenue came in at $36.46 billion. Analysts believe that the fundamentals and the outlook both are positive and Meta has the ability to deliver.
The company’s financial results have improved significantly over the past few quarters. It has implemented generative AI features that meet the needs of advertisers and ensure higher views and conversions.
Meta’s revenue is driven by the growing advertising revenue and this segment is set to expand throughout 2024. The company also has enough liquidity to keep investing in AI which will reap rewards in the years to come.
Blue-Chip Stocks to Buy: Visa (V)
Fintech giant Visa (NYSE:V) is one of the best stocks to buy and hold for the long term. A highly resilient company, Visa hasn’t disappointed even in times of high inflation and high interest rates.
Trading at $279, the stock is up 8% YTD and has shown volatility over the past month due to the mixed inflation reports. 20 analysts have a buy rating for the stock with an average price target of $315, a 12% upside from the current level.
There are several reasons to bet on Visa stock. It caters to over 100 million merchants and takes a fee from every transaction made using a Visa card. This ensures steady revenue and keeps the operating costs down. As we transition towards a digital economy, Visa is set to benefit.
Its quarterly results were impressive with a revenue of $8.8 billion, up 10% YTD, and the total processed transactions stood at 55.5 billion, up 11%. Visa is in an excellent position today and it has the ability to expand its market share as card usage increases.
Microsoft (MSFT)
Tech giant Microsoft (NASDAQ:MSFT) is one stock that will never disappoint you. Having reported impressive numbers, the company proved its domination in the cloud segment. Its Azure revenue increased 31% YOY. The company is investing heavily in AI and has already started seeing results.
Microsoft is constantly evolving and did not waste any time before investing in OpenAI and integrating AI in its products and services. It has introduced Copilot which has already become a huge success and recently launched the Copilot for Security.
Exchanging hands for $420 today, the stock is up 13% YTD and has increased 34% in the past 12 months. It is also a dividend-paying stock with a yield of 0.71%. 31 analysts have a buy rating for the stock with an average price target of $491, showing a potential upside of 16%.
Alphabet (GOOG,GOOGL)
Trading at $175, Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) stock looks undervalued to me. The stock is up 25% YTD and 44% in the past 12 months. It is trading much lower than its competitors Microsoft and Amazon but has a lot of potential to move higher.
Alphabet’s quarterly results were very impressive with a 15% jump in revenue to reach $80.5 billion and the net income stood at $1.89 per share. One thing to keep in mind is that Google will never be dethroned.
It is hard to imagine our lives without Google and even if competitors make similar products, they will not be able to replace the company. It holds the top position in internet search and has shown steady revenue growth in the cloud segment.
On Tipranks, 32 analysts have a buy rating for the stock with an average price target of $195, a 12% upside from here. The company declared its first-ever dividend this quarter and I think it is the beginning of something that will last long.
Chevron (CVX)
12 analysts on Tipranks have a buy rating for Chevron (NYSE:CVX) with an average price target of $188, offering a 16% upside. As of writing, CVX stock is trading for $161 and is up 7% YTD.
The oil and gas giant is a cash-generating machine and it has reported impressive financials due to the soaring oil prices. Mizuho has a price target of $205 for the stock which is a 27% upside from the current level.
The demand for combustion-powered vehicles will continue to grow even if we take small steps towards electrification. This will work in favor of Chevron as the production unit will expand.
In the recent quarter, it reported earnings of $5.5 billion and a 12% rise in production YOY. Crude oil was trading at $80 per barrel and this means Chevron is set to benefit. Even if the price drops, Chevron has enough liquidity to keep going.
It is a dividend-paying stock with a yield of 4.05%. Analysts are expecting a strong improvement in fundamentals this year as compared to the previous year.
On the date of publication, Vandita Jadeja 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.