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Many investors spend a lot of time and energy researching and learning about market trends, economic indicators and advances in technology and science to outperform the market. And there’s absolutely nothing wrong with that. But your portfolio also needs a firm foundation, and that’s where you look for reliable blue-chip stocks.
The best long-term reliable blue-chip stocks are those you can safely rely upon to give you performance over an extended period. They represent established and successful companies with a track record of financial stability and dominate their markets.
And while every stock has its ups and downs, reliable blue-chip stocks usually have lower volatility than smaller, less-established companies. They can withstand downturns better than their competitors.
I used the Portfolio Grader to identify several reliable blue-chip stocks for long-term investors. Here are seven that come to mind.
| MSFT | Microsoft | $337.34 |
| NFLX | Netflix | $440.86 |
| GOOG | Alphabet | $123.67 |
| CSCO | Cisco Systems | $50.96 |
| WMT | Walmart | $156.87 |
| NVDA | Nvidia | $429.97 |
| AAPL | Apple | $183.95 |
Microsoft (MSFT)
Source: rafapress / Shutterstock.com
Microsoft (MSFT) was already one of the best-known blue-chip stocks even before it helped unleash ChatGPT on the world. The chatbot developed by OpenAI (with some Microsoft investment) uses artificial intelligence to generate instant human-like responses to queries.
It’s a fantastic technology that helped push MSFT stock up 40% in 2023. But this is only the beginning. Evercore ISI analyst Kirk Materne estimates AI could add $100 billion to Microsoft’s annual revenue by 2027.
Earnings for the first quarter included revenue of $52.8 billion and earnings per share of $2.45, beating expectations of $51.02 billion and EPOS of $2.23.
MSFT stock has a “B” rating in the Portfolio Grader.
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Netflix (NFLX)
Source: TY Lim / Shutterstock.com
Netflix (NFLX) wasn’t the best investment for several years. The stock dipped severely in 2018 and 2019 as competing streaming services came online.
True, numbers and viewership returned during the Covid-19 lockdowns when everyone turned to screen time to amuse themselves. But those gains didn’t last long, and Netflix stock lost 72% of its value from its coronavirus peak until mid-2022.
But now the stock’s on a resurgence. And it’s primarily because Netflix decided to monetize its product by (finally) cracking down on password sharing.
For years, Netflix gave a wink and a nod to the practice of shared passwords. It even became somewhat of a cultural touchstone if a friend or former partner wanted to sever a relationship entirely. A surefire way to do it was to change their Netflix password.
But as NFLX stock continued to fall and Netflix struggled to grow daily active users, it finally took action. You can still share your password with someone who doesn’t live in your home, but now you have to pay an additional $8 monthly.
Netflix estimates that 43% of its customers share passwords – roughly 100 million customers. That’s a lot of money on the table, and Netflix should be able to pocket a decent amount.
NFLX stock has an “A” rating in the Portfolio Grader.
Alphabet (GOOG)
Source: salarko / Shutterstock.com
Few companies are as big as or as well-known as Alphabet (GOOG) (GOOGL). The company’s dominant search engine is so famous that it’s essentially a verb at this point – how many times have you said or heard someone say, “Just Google it?”
Alphabet is the king of search, owning 86% of the market share. Advertising makes up about 80% of Alphabet’s revenue, $69.8 billion in the first quarter.
Even though advertising spending has been down for nearly a year, the global ad market is expected to grow from $550 billion in 2022 to $800 billion this year. That bodes well for Alphabet as a reliable blue-chip stock.
Alphabet also is a player in the growing cloud market. Google Cloud revenue came in at $7.5 billion in the first quarter, a 28% increase from a year ago.
It’s also finally released a new version of Google Search that’s powered by generative AI and designed to compete with Microsoft Bing, which is powered by ChatGPT. That should help it defend its position in the search market.
GOOG stock has a “B” rating in the Portfolio Grader.
Cisco Systems (CSCO)
Source: Valeriya Zankovych / Shutterstock.com
Cisco Systems (CSCO) is a networking and communications company that connects people and devices across the internet. The company hasn’t grown as quickly as others on this list – CSCO stock is up only 6%, compared to the Nasdaq composite’s return of nearly 30%.
But as a reliable blue-chip stock, you’re investing in Cisco for the long haul. And the future is undoubtedly bright. Cisco expects moderate revenue growth in the fiscal year 2024, which begins this September. As supply chain issues with computing gear continue to improve, Cisco will clear out its backlog of orders and improve its numbers even more.
Earnings for the company’s fiscal second quarter was $13.6 billion, a 7% increase from a year ago. CSCO stock has a “B” rating in the Portfolio Grader.
Walmart (WMT)
Source: Harun Ozmen / Shutterstock.com
Arkansas-based Walmart (WMT) isn’t just any retailer. The company is the world’s biggest retailer. It now has 10,500 stores around the world.
While a recessionary environment (something that the Federal Reserve warns is still a possibility) and high inflation is never good for retail stocks, Walmart has the advantage of being a discount retailer.
That means that customers are more inclined to get household goods and groceries at Walmart than other stores because it’s seen as having better value and prices.
Earnings for the fiscal 2024 first quarter included revenue of $152.3 billion, up 7.6% from a year ago. Comparable store sales in the U.S. were up 7.4%, and international sales increased 12.9%. E-commerce was also a strong revenue driver, gaining 27% from a year ago.
WMT stock is up nearly 10% so far this year. And if you like dividends, you’ll appreciate that Walmart’s increased its dividend annually for more than 50 years.
WMT stock has a “B” rating in the Portfolio Grader.
Nvidia (NVDA)
Source: FP Creative / Shutterstock.com
Generative AI is also helping to propel Nvidia (NVDA) to unexpected heights. The chip maker makes equipment that powers ChatGPT, and its success and the rise of AI created an increase in demands from computing and generative AI end users.
Nvidia increased its revenue target for the second quarter from $7.2 billion to $11 billion, which sparked a 25% jump in NVDA stock in a single day. Nvidia is now up over $1 trillion in market cap, as the stock increased 180% this year.
I’m expecting that trend to continue. Analysts are increasing their price targets for NVDA stock, and the consensus price target is now $460. That indicates another 12% gain for Nvidia is still possible.
NVDA stock has an “A” rating in the Portfolio Grader.
Apple (AAPL)
Source: Eric Broder Van Dyke / Shutterstock.com
A $1 trillion market cap is pretty impressive, but that’s small potatoes compared to Apple(AAPL). The maker of Mac computers and the iPhone sports the biggest market cap for a publicly traded company globally, reaching $2.8 trillion. A $3 trillion market cap is likely in the cards soon.
Apple is always good at coming up with new or improved products, and it featured several that are powered by machine learning at this year’s annual Worldwide Developers Conference (WWDC).
But what I like just as much is Apple’s powerful Services division, which includes things like the App Store and Apple Cloud. The App Store, in particular, is a significant revenue generator for Apple because it merely hosts products that other developers create and want to sell or distribute.
Apple takes a percentage of the sales as its cut. That means it gets revenue without going deep into research and development, giving the Services division better profit margins.
Apple is having a spectacular year, up 41%. It has a “B” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in MSFT, GOOG and NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in AAPL. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
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