These stocks allow investors to buy shares in stable companies that have a large market capitalization. While semiconductor sales reached an all-time high in 2022, a downturn in the second half of the year significantly limited growth. Despite the short-term decline, the industry’s long-term growth prospects remain bright. Therefore, investors looking to buy quality chip stocks could consider United https://g-markets.net/helpful-articles/ig-index-client-sentiment-analysis-using-excel/ Microelectronics Corporation (UMC) and Photronics, Inc. (PLAB) now. Although blue-chip stocks have been proving their relative stability over decades, it’s crucial to have a diversified portfolio with more than one type of stock. Even with a list of the largest companies you consider rock-solid, you shouldn’t invest exclusively in their individual stocks to make up the bulk of your portfolio.
Forbes Advisor has surveyed the stock market to pick the best blue chip stocks. We have focused on large-cap equities that have a long-term record growing profits and dividends, plus a reasonable valuation. Younger investors may focus more on individual blue chip stocks, while older investors might have more blue chip funds.
You can base price targets on past price action, technical indications like the 150-day EMA or even the analysts. The analysts’ targets, the consensus target, is a closely watched figure for most blue-chip stocks and will often produce strong moves when reached, touched or crossed by the price action. Additionally, the global semiconductor market is expected to grow at 12.2% CAGR until 2029.
Investing in blue-chip funds
With a market cap of more than $2.7 trillion, Apple is the largest public company in the world. Climbing to this valuation has brought investors lucrative gains. The company has the best annualized return over the past decade of any stock on this list.
The chipmakers power much of the world’s technology, making it possible for loved ones to talk face-to-face from across an ocean or for Wall Street to move billions of dollars in the blink of an eye. Advanced Micro Devices (known as AMD) has historically played second fiddle to Intel. But back in 2010, AMD offloaded its chip fab segment — now GlobalFoundries (GFS -0.03%) — to focus solely on chip design. Although AMD is still far smaller than Intel, it has been picking up serious market share in both the data center and personal computing space. Qualcomm was a darling of the chip industry during the 2000s and 2010s, riding the wave of mobility as smartphones went from a novel idea to a part of everyday life.
Taiwan Semiconductor Manufacturing
Even though blue-chip stocks are generally reliable performers, investing in one single stock puts all your eggs in one basket. Thus, if you buy individual stocks, you might want to take extra care to diversify the rest of your portfolio. Funds provide a measure of diversification, a key risk-management strategy, because each fund contains the stock of many companies.
Lincoln National reported first quarter 2023 results on May 9th, 2023, for the period ending March 31st, 2023. The company had a net loss of $(5.37) per share in the first quarter, which compared unfavorably to $8.39 in the first quarter of 2022. On April 25th, 2023, 3M reported announced earnings results for the 2023 first quarter.
What Is an Example of a Blue Chip Company?
When it comes to the stock market and what risk-averse investors should focus on, there are blue-chip stocks and everything else. This pricing power also means these companies generate positive free cash flow (FCF) which they can use to reward shareholders. A dividend payment is a way for shareholders to “collect rent” on the shares they own.
- Realistically, then, the hot ticker may be facing a corrective phase.
- The firm introduced a new graphics processing chip, the A800, that can be exported to China under the new U.S. export restrictions on AI (artificial intelligence) chipsets.
- HON has averaged a solid annual return compared to the S&P 500 over the past decade.
- Specifically, the market prices shares at a forward multiple of 16.8.
- ABBV’s dividends are where the company shines as a blue chip stock.
- The chip downturn of 2023 is putting a delay on that resumption of growth.
Some investors demand that a stock be included in a particular index, such as the Dow Jones Industrial Average. Others may only include dividend-paying stocks in their list of blue-chip stocks. Still others may have specific market capitalization thresholds for blue-chip stocks.
Are Blue Chip Stocks a Good Investment?
The company also realizes revenue from software, peripherals, digital media and services. The technology giant consistently has churned out new products, and the ongoing stream of new offerings continues to garner more consumer approval. The broader market pullback in recent months hasn’t been kind to chip stocks, dragging the PHLX Semiconductor Index down about 16% so far in 2022. Wolfspeed Inc is involved in the manufacturing of wide bandgap semiconductors. It is focused on silicon carbide and gallium nitride (GaN) materials and devices for power and radio-frequency (RF) applications. The company serves applications such as transportation, power supplies, inverters, and wireless systems.
Blue-chip stocks are giant companies that can boast an immaculate reputation they have been earning for years. The main distinctive features of such business entities are financial stability, a well-designed infrastructure, steady earnings reports, and a history of solid performance. Blue-chip stocks manage huge cash flows and usually have a market cap of billions of dollars. However, remember that all types of trading imply the use of complex instruments, involve risks, and may lead to losing money rapidly. We see limited downside in the stock’s price, as inventory correction has already been priced in, he adds.
Blue chips get their name from the game of poker, where a blue chip has the highest value and is the most attractive to players. That’s why they can make excellent investments for the long-run. And their strength and reliability make them compelling investments for investors of all experience levels, from beginners to experts. For the quarter, revenue grew 128.3% to $2.58 billion, but this was $160 million less than expected. Adjusted earnings-per-share of $10.32 compared very favorably to $2.38 in the prior year and was $3.26 above estimates.
Microchip companies design and manufacture the basic components that make computing systems. Microchip businesses are part of the technology sector, but they are also advanced engineering and manufacturing companies. As chips proliferate throughout all sectors of the economy, the producers of these basic tech building blocks are an increasingly important part of daily life around the globe. You can buy shares of many blue chip companies in a single transaction with blue chip funds. Your burning questions about investing in blue chips are answered below. “Steady Eddy” investing focuses on companies with consistent results and long-term growth.
In its fiscal first-quarter report ended Dec. 31, the company reported a 62% and 60% year-over-year decrease in revenue and earnings, respectively. There’s also the continued digitization of industrial economies – which drives the growth in cloud computing, which drives data center spending, which drives the demand for more and more semiconductors. The easing of supply-chain issues could bring focus back to these catalysts next year. Bookmark this page to stay on top of the latest news on chip stocks and the semiconductor sector as a whole.
For the quarter, revenue of $7.7 billion beat analyst estimates by $190 million. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. To learn more about our rating and review methodology and editorial process, check out our guide on how Forbes Advisor rates investing products.