The future of the United States economy looks promising. This is thanks to a robust growth rate, a resilient job market, and lower inflation compared to other nations. The country’s GDP exceeded expectations. There was a 3.3% gain in the fourth quarter of 2023 and a solid 2.5% growth over the year. This trajectory outpaced advanced economies globally. This led us to create this list of blue-chip stocks to buy.
Contributing factors include significant economic stimulus measures, a flexible job market that adapted swiftly to challenges, and energy independence, shielding the U.S. from external shocks and fostering a more moderate inflation environment. In the current robust economic climate, consider these three stocks for exceptional returns both in the short term and for the long term.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is a tech giant known for its large e-commerce platform, cloud computing services through Amazon Web Services (AWS), and digital content offerings like Prime Video and Prime Music. With a focus on innovation and customer satisfaction, Amazon has established itself as a leader in the online retail, technology and entertainment sectors globally.
With 58 of 60 analysts rating the stock a “Buy” and the other two rating it a “Hold,” Amazon has consistently outperformed investors’ expectations. In just the past year, net income has increased by 57.39% to $10.62 billion in the last quarter. Earnings per share as of the quarter ending December 31 have also skyrocketed to $1—a one-year increase of 3,608.52%. Quarterly YoY earnings growth of 3,721.60% and quarterly YoY revenue growth of 13.90% both represent robust financials.
Accompanying strong financials, Amazon is part of an ever-growing technology sector with a valuation of $8.51 trillion and a CAGR of 6.2%. This varied product mix allows them to dip into not just this one sector, but also streaming, cloud computing, retail and health to name a few. As Amazon becomes more and more powerful and influential, it not only develops a tendency to do well when the market does too, but also a resistance to a weak economy.
Amazon is a strong, well-known company that has proven its potential repeatedly in the past. As time goes on, Amazon will stay strong and remain a perfect blue-chip buy.
Apple (AAPL)
Apple Inc. (NASDAQ:AAPL) is a hardware/SaaS company involved in the development of smart technology. It also provides consumers with software such as a proprietary UI, Apple Music, Apple Arcade, etc.
Quarterly earnings have regularly surpassed expectations. The company has 39 analysts predicting an upside of ~8.7%. It is one of the largest companies in the world, with a market cap of $2.875 trillion. It is profitable, with a net profit of 26.16%, and a P/E ratio of 28.82. This is below the sector average of 31.65, indicating strong performance. Strong YoY quarterly earnings growth of 13.1% and an EBITDA of $130.11 billion indicate great financials.
The technology sector is valued at $8.51 trillion, with a CAGR of 6.2%, and is expected to reach a market of $9.039 trillion by 2028. Both product and service sales have seen YoY increases this quarter, with a 0.07% increase in product sales, and an 11.3% growth in service sales. A weak economy has throttled sales, but innovative products such as the Apple Vision Pro will grow interest.
Apple is a company with historically high stock returns and is expected to do so in the future. It is a great blue-chip pick, and investors should consider investing in it. Furthermore, this is one blue-chip stock you need to add to your portfolio.
NVIDIA (NVDA)
Nvidia Co. (NASDAQ:NVDA) is a hardware and SaaS company involved in developing Graphical Processing Units (GPUs) and AI optimization software. Its hardware is being used by multiple companies at the forefront of modern AI.
NVDA’s quarterly earnings have regularly surpassed expectations, often by margins north of $0.5 billion. Having grown rapidly last year, it is one of the largest companies in the world, and has the financials to back it up. It is profitable, with a net profit of 42.10%, and a P/E ratio of 95.03. This is significantly below the industry average of 1,437.07, indicating exceptional performance. An EBITDA of $22.16 billion, debt-equity of 33.15%, and operating cash flow of $18.84 billion show great financial management by corporate.
Furthermore, the semiconductor industry is expected to reach $1.883 trillion by 2032 with a CAGR of 12.28%. Innovative software and hardware developed by NVDA allow it to outpace the industry average. NVDA is encouraging governments to use its chips in public-sector AI projects, increasing its demand and revenue. Recently, it also launched software that allows its RTX 30 and 40 series chips to run on-device AI chatbots.
NVDA produced record-breaking returns last year and is likely to continue doing so. Moreover, if you are looking for blue-chip stocks to buy, start here.
On the date of publication, Michael Que did not have (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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.