What are "Blue Chip" Stocks?

In the investing world, “blue chip” stocks can be considered the classic all-stars. They

usually represent the companies that have been around the longest, made the biggest

impact, and have the most recognizable names: think Apple, Johnson & Johnson, or Coca-Cola.

But why are they called blue chip? Well, for those who like the casino, it should be a familiar term. It comes from poker, where blue chips are the most valuable. In investing, the term is used to describe companies that are large, stable, and consistently profitable, or the kinds that tend to ride out rough markets better than others. Overall, people often include blue chip stocks in their stock packages due to these companies’ tendencies to survive economic ups and downs better than others. But that doesn’t mean they’re immune to risk, of course. No company is, but these blue chips have strong reputations, steady revenue, and a history of weathering storms that keep them steady and sturdy in the face of disrupt.

Typically, what you’re looking for in a blue chip stock is:

• A long track record of strong performance

• High market caps that are huge in terms of value

• Reliable earnings, even in tough times

• Leadership positions in their industries

  
  

Because of this, investors often consider blue chip stocks to be safer choices, especially for

building a long-term stock package. That being said, though… no company is risk-proof.

Even big brands can stumble due to changing trends, tech disruption, or leadership

changes.

Blue chip stocks might not see massive short-term gains like startups or meme stocks, but they tend to grow steadily and pay dividends if you invest smartly. If your goal is long-term stability over wild swings, these are worth getting familiar with. They’re time-tested giants with stable performance, which are great for learning the ropes and understanding what “steady growth” looks like.