In the investment sphere, where markets shift like dunes in the desert, identifying the right stocks for your portfolio can be as challenging as prospecting for gold. However, certain fabled blue-chip stocks stand the test of time.
As we step into the second half of September, it’s time for investors to embark on their modern-day gold rush. The article lists seven must-have blue-chip stocks that are gleaming with potential.
Overall, the article explores the strengths and strategies of these blue-chip stocks, offering a glimpse into the treasure trove of opportunities they present.
Amazon’s (NASDAQ:AMZN) focus on lowering its cost to serve in its stores’ fulfillment network has paid off.
The shift to regionalization, with separate regions serving smaller geographic areas, has reduced the number of touches for delivered packages by 20% and cut transportation miles by 19%. This reduces costs and improves delivery speed, a factor highly valued by customers.
Also, Amazon’s relentless pursuit of faster delivery times has resonated with customers. In the top 60 largest US metro areas, over half of Prime members’ orders arrive on the same day or the next day. Faster delivery not only boosts customer satisfaction but also increases purchase frequency.
Lowering the cost to serve has allowed Amazon to add more selections at lower price points, particularly in everyday essentials.
Amazon keeps expanding its product offering, with more than 300 million items available for US Prime free shipping, including tens of millions for same-day delivery.
Notably, Amazon Web Services dominates cloud infrastructure. Its strong customer focus, cost optimization assistance, and innovation in custom AI chips (Trainium and Inferentia) have solidified AWS’s position as a reliable partner for businesses looking to harness the power of the cloud.
Finally, Amazon is democratizing access to generative AI, making it more accessible and cost-effective for businesses. With services like Amazon Bedrock, AWS simplifies large language model customization and application development, opening up possibilities across various industries, and making this one of the must-own blue-chip stocks.
Apple’s (NASDAQ:AAPL) success in emerging markets like India, Indonesia, Mexico, and others signifies its ability to tap into new customer bases, making it one of the blue-chip stocks to buy for growth.
Financially, the Services segment’s consistent growth, reaching an all-time high of $21.2 billion. It highlights the increasing importance of recurring revenue streams like Apple Music, AppleCare, and Apple TV+. This steady revenue source strengthens Apple’s position for long-term financial stability.
Apple maintains remarkably high levels of customer satisfaction, with the iPhone, Mac, iPad, and Apple Watch consistently receiving high ratings. This loyalty translates into a growing active installed base.
Lastly, Apple’s continued investment in research and development is exemplified by Apple Vision Pro and advancements in the Mac and iPad, demonstrating its commitment to innovation and keeping it at the forefront of technology for years.
With over 2 billion active devices, Apple’s ecosystem remains robust, supporting its future expansion and keeping customers engaged with its services.
ASML (NASDAQ:ASML) reported approximately €38 billion backlog, indicating robust product demand. The company makes deep ultraviolet and extreme ultraviolet lithography systems. Its focus on high-NA (numerical aperture) EUV systems, such as the NXE:3800E, contributes to higher average selling prices and gross margins.
Notably, the semiconductor industry is driven by secular trends like electrification, AI, and increasing lithography intensity on future technology nodes. ASML’s products are integral to semiconductor manufacturing, making the company well-positioned to capitalize on these trends.
ASML is experiencing strong demand from Chinese semiconductor manufacturers, investing in mid-critical to mature semiconductor nodes to support domestic mega-trends like electrification and IoT.
China’s strategic investments fuel demand for ASML’s products, making it a sustainable market.
Overall, ASML’s technological leadership in lithography equipment, including EUV technology, positions it as a critical partner for semiconductor manufacturers. Especially those looking to advance their chip manufacturing capabilities, making ASML one of the best-positioned blue-chip stocks to buy.
This user-centric approach enhances Alibaba’s long-term market position.
The company onboarded numerous new merchants, significantly contributing to Alibaba’s value-for-money battle. Merchant confidence increased, increasing merchant spending and making Taobao and Tmall their preferred long-term business platforms.
Strategically, Alibaba invested in AI, improving merchant tools and enhancing the shopping experience for users. This technological innovation strategy will yield long-term benefits as AI applications evolve.
Alibaba’s focus on user growth and technology investments did not hamper its financial performance. The company reported a 9.1% YoY increase in adjusted EBITDA, indicating its ability to balance investments and profitability.
Finally, Alibaba diversified its business, achieving revenue growth in various segments, including international retail, local services, Taobao, cloud computing, digital media entertainment, and more.
This diversification reduces reliance on any single revenue stream and supports long-term stability.
Nvidia (NASDAQ:NVDA) experienced record-breaking data center revenue, up 171% YoY. Increased demand from cloud service providers and large consumer internet companies for Nvidia’s HGX platform primarily fueled this growth.
The HGX platform plays a critical role in generative AI and LLMs, meeting the needs of major companies like AWS, Google Cloud, Meta, Microsoft Azure, and Oracle Cloud.
Further, Nvidia’s US data center growth was robust, where customers heavily invested in AI and accelerated computing.
The company also maintained a consistent Chinese market share, accounting for 20% to 25% of data center revenue. The global expansion positions Nvidia to benefit from the growing demand for accelerated computing.
Nvidia has partnered with key industry players to speed up AI adoption. These collaborations expand Nvidia’s reach with AI solutions. They also make it easier for enterprises to develop and deploy AI models and applications.
Also, introducing AI copilots and assistants opens up new multi-billion-dollar market opportunities in various professional fields.
This forward-thinking approach allowed them to leverage the AI revolution effectively. The US market, in particular, demonstrated an appetite for AI applications, including LLMs, for transforming businesses and institutions. Palantir’s products, such as Foundry and AIP, catered to this demand, positioning the company for significant growth.
Notably, Palantir maintained a presence in the government sector, particularly in the US. Despite potential contract timing uncertainties, the company secured substantial government contracts, such as with the US Special Operations Command.
Palantir’s product suite, including AIP Builder, AIP Terminal, AIP Logic, and AIP Automate, empowered users to harness the power of AI effectively. Introducing AIP Assist, a tool-aware AI assistant, further enhanced user productivity.
Overall, Palantir’s focus on delivering results and impact for its partners while innovating in AI has led to consecutive quarters of GAAP profitability.
Palantir expanded its reach beyond the US, securing partnerships and contracts in countries like Japan, Korea, Canada, and the Middle East. Therefore, this diversification broadened its customer base and market presence.
This growth brings the total number of members to 6.2 million, representing a 44% YoY increase. A larger member base provides more opportunities for cross-selling and monetization.
Launching new products, like SoFi Travel, and offering IPOs to retail investors diversify its portfolio and enhance brand awareness.
The company has made strides in monetizing its services and improving profitability. Financial Services net revenue more than tripled YoY to $98 million. SoFi expects all three business segments to post positive contribution profits by Q4.
Moreover, SoFi’s strong balance sheet, characterized by $12.7 billion in deposits and a lower cost of capital following the acquisition of SoFi Bank, ensures financial stability and flexibility.
Efforts to enhance operational efficiency, reduce customer acquisition costs, and expand product offerings, like SoFi Travel and retail IPO access, contribute to the company’s success.
As of this writing, Yiannis Zourmpanos held a long position in ASML, BABA, and PLTR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.