Blue-chip stocks are an ideal investment choice during market fluctuations. They can protect your portfolio as these stocks show resilience during economic downturns. Also, they offer qualities like dominant market positions, wider presence, reliability, and stable returns and income.
Given this backdrop, it could be wise to invest in current Wall Street favorite blue-chip stocks Apple Inc. (AAPL), Amazon.com, Inc. (AMZN), and Alphabet Inc. (GOOGL) for potential returns in the long run.
The inflation rate in the U.S. economy is easing, raising optimism that the US central bank will cut interest rates in the following weeks. The annual inflation rate slowed for a consecutive 5th month to 2.5% in August 2024, marking its slowest pace since February 2021.
According to the U.S. Bureau of Labor Statistics report, the consumer price index for all urban consumers (CPI-U) increased at the same rate as in July of 0.2% on a seasonally adjusted basis. The consumer prices were impacted by falling petrol prices, used cars and trucks, and other items.
With these optimistic navigations, the U.S. economy grew faster in the second quarter as consumer spending rose and corporate profits rebounded, helping to sustain the expansion. Besides, the anticipation of interest rate cuts soon continues to create volatility across the financial markets, with speculation over the size of the first rate cut.
Amid these volatile and unexpected market dynamics, blue-chip stocks present promising opportunities. Blue chip stocks are stocks of well-known industry-leading companies with solid business models and impressive track records.
Given these factors, let’s delve deeper into the fundamentals of top blue-chip stocks: AAPL, AMZN, and GOOGL.
Apple Inc. (AAPL)
With a $3.38 trillion market capitalization, AAPL designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories globally. The company provides iPhone, Mac, iPad, wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod.
On September 9, AAPL announced a new lineup of AirPods® models and features. This includes AirPods 4, which are the most advanced and comfortable headphones created by AAPL, having an open-ear design, and are available in two distinct models: AirPods 4 and AirPods 4 with Active Noise Cancellation (ANC).
Also, during the fall, AirPods Pro® 2 will introduce the world’s first end-to-end hearing health experience, delivering active Hearing Protection, a scientifically validated Hearing Test, and a clinical-grade Hearing Aid feature.
On the same day, AAPL launched iPhone® 16 Pro and iPhone 16 Pro Max, featuring Apple Intelligence™, larger display sizes, new creative capabilities with innovative pro camera features, impressive graphics for gaming, and more, all powered by the A18 Pro chip.
Further, it also introduced the Apple Watch® Series 10, featuring a refined design and offering new capabilities to make it even more powerful, intelligent, and sophisticated. Apple Watch Series 10 is the thinnest Apple watch and provides the biggest, most advanced display of any Apple Watch. It also features new sleep apnea notifications, faster charging, water depth, and temperature sensing.
AAPL’s total net sales rose 4.9% from the year-ago value to $85.78 billion during the third quarter that ended June 29, 2024. Its operating income increased 10.2% year-over-year to $25.35 billion. The company’s net income and EPS came in at $21.45 billion and $1.40, reflecting growths of 7.9% and 11.1% from the prior year’s quarter, respectively.
Street expects AAPL’s revenue and EPS for the fourth quarter (ending September 2024) to increase 5.2% and 9.5% year-over-year to $94.17 billion and $1.60, respectively. Furthermore, the company surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.
Shares of AAPL have surged 24.5% over the past six months and 21.6% over the past year to close the last trading session at $216.32.
AAPL’s robust growth prospects are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has an A grade for Quality. It also has a B grade for Sentiment. Within the Technology - Hardware industry, AAPL is ranked #16 out of 40 stocks.
Click here to access additional ratings of AAPL for Growth, Value, Stability, and Momentum.
Amazon.com, Inc. (AMZN)
With a $1.96 trillion market cap, AMZN engages in the retail sale of consumer products, advertising, and subscription services through online and physical stores internationally. It operates through three segments: North America; International; and Amazon Web Services (AWS).
On September 16, AMZN’s Amazon Web Services. Inc. (AWS) and Intel Corporation (INTC) announced a co-investment to help advance U.S.-based chip manufacturing through a multi-year, multi-billion-dollar arrangement encompassing products and wafers from Intel.
The collaboration marked a significant expansion of the two companies’ longstanding alliance to help customers power virtually any workload and accelerate the performance of artificial intelligence (AI) applications.
Also, on August 28, AWS announced the general availability of AWS Parallel Computing Service, a new managed service that helps customers easily set up and manage high-performance computing (HPC) clusters. The new service allows scientists and engineers to quickly scale simulations to validate models and designs.
The AWS Parallel Computing Service can accelerate innovation in areas like fast-tracking drug discovery, uncovering genomic insights, building engineering designs, running weather applications, and building scientific and engineering models.
During the second quarter that ended June 30, 2024, AMZN’s total net sales increased 10.1% year-over-year to $147.98 billion. Its operating income grew 91% from the year-ago value to $ 14.67 billion. The company’s net income and EPS came in at $13.48 billion and $1.26, up 99.8% and 93.8% from the prior year’s quarter, respectively.
Analysts expect AMZN’s revenue and EPS for the third quarter (ending September 2024) to increase 9.9% and 20.6% year-over-year to $157.18 billion and $1.13, respectively. Moreover, the company has topped the consensus EPS estimates in all four trailing quarters.
AMZN’s shares have gained 6% over the past six months and 32.1% over the past year to close the last trading session at $184.89.
AMZN’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has an A grade for Sentiment and a B grade for Momentum and Quality. Within the B-rated Internet industry, AMZN is ranked #13 among 53 stocks.
In addition to the POWR Ratings we’ve stated above, we also have AMZN ratings for Stability, Growth, and Value. Get all AMZN ratings here.
Alphabet Inc. (GOOGL)
With a $1.94 trillion market cap, GOOGL provides various products and platforms internationally. The company operates in Google Services; Google Cloud; and Other Bets segments. It provides products and services, including ads, Android, Chrome devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube.
On May 2, GOOGL’s Google Cloud (GOOG) and MongoDB, Inc. (MDB) collaborated to optimize Gemini Code Assist to enable enhanced suggestions for application development and modernization on MongoDB—the industry-leading developer data platform.
With collaboration, Gemini Code Assist is able to assist developers in getting answers and information about MongoDB code, documentation, and best practices. This allows them to more quickly prototype new features and accelerate application development.
During the second quarter that ended June 30, 2024, GOOGL’s revenues increased 13.6% year-over-year to $84.74 billion. Its income from operations grew 25.6% from the year-ago value to $27.42 billion. The company’s net income and EPS stood at $23.62 billion and $1.89, up 28.6% and 31.2% year-over-year, respectively.
In addition, the company’s cash and cash equivalents were $27.22 billion as of June 30, 2024, versus $24.05 billion as of December 31, 2023.
Analysts expect GOOGL’s EPS for the third quarter (ending September 2024) to increase 18.5% year-over-year to $1.84, and its revenue is estimated to increase 12.5% year-over-year to $86.27 billion for the same period. Moreover, the company surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
GOOGL’s stock has soared 7% over the past six months and 14.4% over the past year to close the last trading session at $158.06.
GOOGL’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
GOOGL has a B grade for Quality and Sentiment. It is ranked #11 among the 53 stocks in the B-rated Internet industry.
Click here to access additional GOOGL ratings for Value, Stability, Momentum and Growth.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
AAPL shares were trading at $216.17 per share on Tuesday afternoon, down $0.15 (-0.07%). Year-to-date, AAPL has gained 12.70%, versus a 19.06% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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