In this article, we will take a detailed look at the most profitable blue chip stocks to buy now.
Blue chip stocks are large, financially stable companies with strong market presence, consistent profitability, and regular dividend payments. They are generally market leaders, with strong business models that are resilient across business cycles. Many blue chip stocks are included in the Dow Index (DJIA), so the index is often considered an indicator of their overall performance. Investors would typically flock to blue chip stocks in times of market volatility, economic uncertainty, or when the economy is in late-stage expansion, as these large-cap companies tend to offer stability and consistent returns versus smaller or riskier companies.
We believe that blue chip stocks, and the constituents of the Dow index in particular, represent a unique blend of the value and size factors, combining the financial stability, earnings consistency, and attractive market valuations typically associated with value stocks, with the scale and market dominance of large-cap companies. This dual exposure enhances their resilience in economic downturns and makes them well-positioned to outperform during recessions, when investors tend to shift towards quality and safer stocks. For reference, the Fama–French Three-Factor Model, introduced in 1993, concludes that incorporating exposure to several favorable factors can further enhance stock returns. In this context, both the value and large size factors outperformed in the last years, and especially year-to-date.
READ ALSO: 10 Most Profitable Large Cap Stocks to Buy Now
Our research indicates that recession fears and Trump Turmoil are likely to persist and potentially continue to favor the most profitable blue chip stocks over everything else. The US administration appears to be eroding the trust of investors through a plethora of unpredictable and contradictory moves – Trump appeared to soften his stance on the US-China trade war, saying that tariffs on Chinese goods “will not be as high as 145 per cent” and that “it’ll come down substantially, but won’t be zero”. While this represents a good signal at first glance, such actions are very likely to deter the US’s partners from negotiating for tariff exemption, simply because the current administration has become too unpredictable.
Our thoughts are confirmed by the VIX volatility index remaining elevated compared to the long-term trend, while the crude oil price remains in a downtrend, suggesting expectations of weaker industrial demand and a weaker economy. On the consumer side, there are reasons to believe that US consumers are getting more cautious than ever – the employee quits rate, as reported by FRED, declined substantially year-to-date and reached levels comparable to the aftermath of the 2008 financial crisis. When employees are reluctant to quit it means two things: (1) it is tough to get jobs out there, implying that the economy is slowing down, and (2) their expectation about the future becomes more pessimistic, which leads to less willingness to quit and potentially risk difficulties finding a new job. Both these factors mean the consumer spending will likely slow down in the following quarters, further pressuring GDP growth.
The key takeaway for the readers is that the odds of a recession and of a prolonged bear market still persist. In this context, the best hedging strategy would be to hold shares of companies that perform well in bull markets, but at the same time can offer protection against turmoil and recessions. Our belief is that the most profitable blue chip stocks are the best candidates, because they possess the wide moat and strong cash flow capacity to withstand any economic slowdown and even potentially absorb the incremental tariffs. Given this economic landscape, we will take a look at some of the most profitable stocks to invest in.
Our Methodology
To compile our list of most profitable blue chip stocks to buy now, we screened for current and former members of the Dow Jones Industrial Average index and identified companies with the highest net income generated in the latest reported fiscal year. From that group, we picked companies with the highest net profit margin, which suggests sound financial health and excellent cost management. The stocks are ranked in ascending order of their net profit margin as of the most recent quarter. For each stock, we also included the number of hedge funds that own the stock as of Q4 2024, according to Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Walmart Inc. (NYSE:WMT)
Net Profit Margin: 2.96%
Last year’s net income: $20.28 billion
Number of Hedge Fund Holders: 116
Walmart Inc. (NYSE:WMT) is a retail giant operating more than 10,500 stores and e-commerce platforms globally. The company’s retail formats operate in 19 countries and include supercenters, discount stores, neighborhood markets, warehouse clubs, and online platforms. Its product offerings include groceries, apparel, electronics, home goods, and pharmaceuticals. Given the defensive nature of its business, WMT ranked 1st on our recent list of 11 Best Counter Cyclical Stocks to Buy According to Analysts.
In the most recent reported Q4 2024, Walmart Inc. (NYSE:WMT) delivered strong sales growth of 5.2% YoY and adjusted operating income growth of 9.4% in constant currency, while continuing to gain market share across countries and income levels. The company’s success was driven by strengthening its ability to serve customers through multiple channels, maintaining low prices, and becoming more convenient, resulting in customers shopping more frequently and buying more items. The business model demonstrated its effectiveness with improved e-commerce economics, particularly in the US, while newer digital businesses contributed to faster growth and a more diversified product mix, with global advertising growing 27% to $4.4 billion, Walmart US Marketplace revenue growing 37% YoY, and global membership income increasing 21% YoY.
Looking forward, Walmart Inc. (NYSE:WMT) is focusing on several strategic initiatives, including expanding same-day delivery capabilities, which now reach 93% of US households, and investing in supply chain automation to lower costs. Over the past 5 years, the company’s transformation has led to global e-commerce penetration reaching 18% of sales, approximately 1,100 basis points higher than in 2020. The business model’s evolution has enabled faster profit growth than sales despite headwinds. New profit streams like advertising and membership allow the company to fund investments in its core business while expanding operating margins. The strong focus on profitability in the current decade has brought solid results for WMT, which secured its 10th place on our list of most profitable stocks to buy now.
9. UnitedHealth Group Incorporated (NYSE:UNH)
Net Profit Margin: 3.81%
Last year’s net income: $25.70 billion
Number of Hedge Fund Holders: 150
UnitedHealth Group Incorporated (NYSE:UNH) is the largest diversified healthcare company offering health insurance plans across employer-sponsored, Medicare Advantage, Medicaid, and individual markets, covering over 50 million people in the US. The company also owns the Optum segment, which provides pharmacy benefit management, healthcare delivery services, and complementary data analytics and technology solutions.
UnitedHealth Group Incorporated (NYSE:UNH) started 2025 with strong growth across businesses but faced unexpected performance challenges, leading to a downward revision in adjusted EPS outlook. The company identified two main factors impacting performance: increased care activity in Medicare Advantage, with Q1 2025 care activity increasing at twice the expected rate, and unanticipated changes in Optum Medicare membership profiles affecting 2025 revenue. The care activity increases were primarily in physician and outpatient services, specifically limited to the Medicare Advantage business and not affecting commercial or Medicaid businesses.
To address these challenges, UnitedHealth Group Incorporated (NYSE:UNH) is implementing several initiatives, including ensuring complex patients engage in clinical and value-based programs, consistently engaging with members in homes and post-discharge settings, and improving physician clinical workflow to better transition to the new CMS risk model. Despite these challenges, UNH’s Medicare Advantage business is still expected to serve an additional 800,000 people this year, while Optum Health is on track to add 650,000 net new patients to value-based care arrangements. UNH remains committed to returning to its long-term EPS growth target of 13% to 16%, making it one of the most profitable stocks to buy now.
8. Amazon.com, Inc. (NASDAQ:AMZN)
Net Profit Margin: 9.29%
Last year’s net income: $30.43 billion
Number of Hedge Fund Holders: 339
Amazon.com, Inc. (NASDAQ:AMZN) is a global tech company operating a large e-commerce platform bearing the same name, cloud computing through Amazon Web Services (AWS), digital streaming, and artificial intelligence. AWS has become the main pillar of growth by providing cloud solutions to enterprises and governments and capitalizing on the artificial intelligence megatrend. Through strategic acquisitions, AMZN has been expanding into adjacent niches like entertainment, healthcare, and logistics.
Amazon.com, Inc. (NASDAQ:AMZN) reported strong financial performance in 2024, with revenue growing 10% YoY and operating income of $21.2 billion, representing a whopping 61% increase YoY. The company’s North America segment grew 10% while the International segment saw 9% growth, excluding foreign exchange impacts, with both segments marking their eighth consecutive quarter of YoY margin improvement. AWS continued its robust performance with 19% YoY growth, reaching an annualized revenue run rate of $115 billion.
Amazon.com, Inc. (NASDAQ:AMZN) demonstrated significant progress in operational efficiency, reducing global cost to serve on a per unit basis for the second consecutive year while simultaneously improving delivery speeds and expanding selection. AMZN’s commitment to AI innovation was evident with approximately 1,000 different generative AI applications either built or in development, spanning across retail, AWS, and other business segments. Looking ahead to 2025, management plans to continue investing in AI capabilities, same-day delivery facilities, and robotics automation to improve delivery speeds and lower the cost to serve. The company’s net income surpassed $30 billion in FY2024, securing an 8th place on our list of the most profitable stocks to buy.
7. Exxon Mobil Corporation (NYSE:XOM)
Net Profit Margin: 10.34%
Last year’s net income: $33.46 billion
Number of Hedge Fund Holders: 104
Exxon Mobil Corporation (NYSE:XOM) is engaged in the exploration, production, refining, and marketing of oil and natural gas, as well as other petroleum products and petrochemicals. The company’s Upstream segment focuses on oil and gas exploration and production, the Product Solutions segment encompasses refining and chemical manufacturing, while the Low Carbon Solutions segment is developing lower-emission technologies such as carbon capture and hydrogen. XOM is a global leader as its operations span six continents, with significant activity in the US, Guyana, and Brazil.
Exxon Mobil Corporation (NYSE:XOM) delivered strong financial performance in 2024, achieving earnings of $34 billion, its third-highest result in a decade despite softer market conditions, making it one of the most profitable stocks in the world. The company generated $55 billion in cash flow from operations and delivered an industry-leading 11% average return on capital employed over five years. Operationally, XOM achieved record production from its advantaged assets and the highest liquids production in over 40 years. In the Permian Basin, the company sees synergies of more than $3 billion per year from its combined Pioneer assets, with production expected to grow from 1.5 million oil-equivalent barrels per day to 2.3 million barrels per day by 2030.
Looking ahead, Exxon Mobil Corporation (NYSE:XOM) has outlined ambitious growth plans, projecting $20 billion more in earnings and $30 billion more in cash flow by 2030 on a constant price and margin basis. The company is focusing on developing new technology-driven businesses, such as Proxxima products and carbon materials, which create opportunities to expand beyond traditional fuels and chemicals into higher-growth, higher-margin markets decoupled from commodity price fluctuations. In its carbon capture business, the company contracted more CO2 for transport and storage than any other company, at 6.7 million tons per year, and is the only company with an end-to-end system capable of capturing, transporting, and storing carbon emissions.
6. Apple Inc. (NASDAQ:AAPL)
Net Profit Margin: 24.3%
Last year’s net income: $166 billion
Number of Hedge Fund Holders: 103.98
Apple Inc. (NASDAQ:AAPL) designs and sells consumer electronics, software, and services. It is best known for its iPhone, iPad, Mac, Apple Watch, and AirPods. The company’s advantage consists of a vertically integrated model and a vast network of financially potent users that has tremendous potential for upselling and cross-selling opportunities, such as the App Store, iCloud, Apple Music, and Apple TV+ services. It is among the most profitable stocks to invest in.
Apple Inc. (NASDAQ:AAPL) reported strong financial results for Q1 2025, with revenue reaching an all-time record of $124.3 billion, up 4% YoY, and record EPS of $2.40, up 10%. The company achieved all-time revenue records across multiple regions, including the Americas, Europe, Japan, and the rest of Asia Pacific, while also seeing momentum in emerging markets with record revenues in Latin America, the Middle East, and South Asia. Services revenue hit an all-time record, with the business generating nearly $100 billion in revenue over the past year, while the company’s installed base reached a new record of over 2.35 billion active devices.
In terms of product performance, iPhone revenue came in at $69.1 billion with record revenues across dozens of markets, while Mac revenue grew 16% YoY to $9 billion and iPad revenue increased 15% to $8.1 billion. The company highlighted the success of Apple Intelligence features in driving iPhone upgrades, with markets where these features were available showing stronger year-over-year performance compared to markets without them. Looking ahead, Apple Inc. (NASDAQ:AAPL) provided guidance for the March quarter, expecting low to mid-single digit YoY revenue growth and Services revenue growth in low double digits, despite a 2.5% foreign exchange headwind.
5. Johnson & Johnson (NYSE:JNJ)
Net Profit Margin: 24.4%
Last year’s net income: $24.24 billion
Number of Hedge Fund Holders: 98
Johnson & Johnson (NYSE:JNJ) is a leading healthcare company focusing on developing treatments in complex areas such as oncology, immunology, neuroscience, and cardiovascular health. The company is known for products such as Darzalex, Stelara, and Tremfya. Its MedTech segment offers medical devices across orthopaedics, surgery, and vision care. JNJ ranked eighth on our recent list of 10 Best Low Risk Stocks To Buy in 2025.
Johnson & Johnson (NYSE:JNJ) delivered strong operational sales growth of 4.2% across their business in Q1 2025, with YoY sales increases in both the innovative medicine and MedTech segments. This growth was particularly impressive as the company managed to achieve it despite facing an approximate 810 basis point headwind from the STELARA product and the impact of Part D redesign. In Innovative Medicine, eleven key brands grew double digits, with DARZALEX continuing to set standards in multiple myeloma with over 20% growth and quarterly sales exceeding $3 billion.
Looking ahead, 2025 is positioned as a catalyst year that will set up accelerated growth through the second half of the decade and beyond. Johnson & Johnson (NYSE:JNJ) strengthened its portfolio through strategic moves, including the completion of the Intra-Cellular Therapies acquisition and a commitment to invest more than $55 billion in US manufacturing, R&D, and technology over the next four years. The company also demonstrated confidence in its future by increasing its dividend for the 63rd consecutive year and maintaining its adjusted reported earnings per share guidance of 6.2% at the midpoint, despite various headwinds, including tariffs. With more than $24 billion in net income generated in the latest fiscal year, JNJ is one of the most profitable blue-chip stocks on our list.
4. Merck & Co., Inc. (NYSE:MRK)
Net Profit Margin: 26.7%
Last year’s net income: $19.44 billion
Number of Hedge Fund Holders: 91
Merck & Co., Inc. (NYSE:MRK) is a global biopharmaceutical company focusing on both human and animal health. Its pharmaceutical division develops and markets a wide range of medicines, vaccines, and biologic therapies. Some notable products include immunotherapy for various cancers and a vaccine against HPV. The Animal Health segment provides veterinary pharmaceuticals, vaccines, and health management solutions for livestock and companion animals.
Merck & Co., Inc. (NYSE:MRK) delivered strong growth in 2024, driven by robust demand for KEYTRUDA in oncology, the successful launch of WINREVAIR, and strong performance in the Animal Health business. However, the company faced challenges with GARDASIL in China, leading to a decision to temporarily pause shipments through at least midyear due to elevated channel inventory and challenging market dynamics. Despite this setback, MRK expects strong growth in the second half of 2025 and into 2026 and 2027. With a $19.44 billion net profit generated in 2024, MRK is one of the most profitable stocks on our list.
Merck & Co., Inc. (NYSE:MRK) has made significant progress in its research efforts, with 20 potential new growth drivers, almost all with a blockbuster opportunity. MRK has nearly tripled the number of assets in late-phase development across various therapeutic areas and modalities over the past three years, representing over $50 billion of potential revenue opportunity. The company remains focused on breakthrough science and innovation, with promising developments across oncology, cardiometabolic, immunology, HIV, and ophthalmology, while maintaining a strong position to pursue additional science-driven, value-creating business development opportunities.
3. Microsoft Corporation (NASDAQ:MSFT)
Net Profit Margin: 35.4%
Last year’s net income: $88.14 billion
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is a global technology leader that offers a complete range of software, services, and devices. Its core offerings include the Windows operating system, productivity and collaboration software (Office suite), cloud platforms, enterprise solutions, development tools, and devices like Surface PCs and Xbox consoles. The company also creates value through platforms like Microsoft 365, Azure, LinkedIn, and GitHub, which have become leaders in their niches. MSFT’s innovation is centered on creating AI responsibly, unlocking next-generation tools that make humans more productive, secure, and efficient.
Microsoft Corporation (NASDAQ:MSFT) delivered strong financial performance in the latest Q2 2025, with revenue of $69.6 billion, up 12% YoY, while operating income increased 17% and earnings per share grew 10%. The Microsoft Cloud surpassed $40 billion in revenue for the first time, growing 21% YoY, while the company’s AI business reached an annual revenue run rate of $13 billion, showing remarkable growth of 175% YoY. Commercial bookings increased significantly by 67%, driven largely by Azure commitments from OpenAI, and the commercial remaining performance obligation grew to $298 billion, up 34%.
In terms of strategic developments, Microsoft Corporation (NASDAQ:MSFT) is seeing enterprises move from AI proof of concepts to enterprise-wide deployments. The company’s Microsoft 365 Copilot is gaining significant traction, with existing enterprise customers expanding their seat purchases and major organizations like Novartis, Barclays, Carrier Group, and Pearson making substantial commitments of 10,000 or more seats this quarter. MSFT is also making strategic investments in AI infrastructure, having doubled its overall data center capacity in the last 3 years and added more capacity last year than any other year in its history. The company remains focused on continuously scaling its fleet globally while maintaining the right balance across training and inference, as well as geographical distribution. With a whopping $88.14 billion net income earned in their latest fiscal 2024, MSFT ranks third on our list of the most profitable stocks.
2. Visa Inc. (NYSE:V)
Net Profit Margin: 54.27%
Last year’s net income: $20.39 billion
Number of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) is a payment processing company that facilitates digital payment transactions between consumers and merchants in over 200 countries. Its proprietary VisaNet network acts as a huge competitive advantage, in that it allows the authorization, clearing, and settlement of payment transactions without issuing cards or extending credit itself. The company also offers value-added services like fraud prevention, tokenization, and data analytics to complement its primary payment processing service. V effectively runs a duopoly along with Mastercard, making it one of the most profitable stocks to consider.
Visa Inc. (NYSE:V) reported strong Q1 2025 financial results with net revenue of $9.5 billion, up 10% YoY, and EPS growth of 14%. The company saw improvements in key business drivers, with payments volume growing 9% in constant dollars, US payments volume up 7%, international payments volume rising 11%, and cross-border volume excluding intra-Europe increasing 16%. The company’s tokenization efforts showed significant progress as well, with 4.7 billion credentials (up 7% YoY) and 12.6 billion tokens (up 44% YoY), while tap-to-pay transactions reached 74% of all face-to-face transactions. This illustrates the company’s success in protecting its competitive advantage with alternative services and quality improvement.
Value-added services remain a key driver of growth, with revenues up 18% YoY in constant dollars, while new flows revenue increased 19% YoY in constant dollars. The company demonstrated strong client relationships through multiple renewals and new partnerships, including agreements with major institutions like ICBC in Mainland China, ICICI Bank in India, and BNP Paribas in Europe. Looking ahead, management has updated its full-year outlook, expecting adjusted net revenue growth to be in the low double digits and adjusted EPS growth in the low teens.
1. NVIDIA Corporation (NASDAQ:NVDA)
Net Profit Margin: 55.85%
Last year’s net income: $32.31 billion
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is renowned for its edge in GPUs and AI platforms. Its primary revenue stems from state-of-the-art data center GPUs like the H100 and Blackwell chips, essential for AI workloads. The company also develops the CUDA software platform, which enables developers to leverage GPU acceleration across various applications. NVDA has become a pivotal player in AI infrastructure, with its GPUs powering major AI models and platforms, and thus ranked 1st on our recent list of 11 Best Innovative Stocks to Buy According to Analysts.
NVIDIA Corporation (NASDAQ:NVDA) reported record financial results for Q4 and fiscal year 2025, with quarterly revenue of $39.3 billion, up 78% YoY, and full year revenue of $130.5 billion, up 114%. The company’s Data Center segment was the primary driver, more than doubling to $115.2 billion for the full year. Demand for AI chips and systems remains extremely strong as customers race to build out AI infrastructure. NVDA successfully ramped production of its new Blackwell architecture, delivering $11 billion in Blackwell revenue in Q4 despite some initial delays.
Looking ahead, NVIDIA Corporation (NASDAQ:NVDA) expects continued strong growth in fiscal 2026, forecasting Q1 revenue of $43 billion. The company sees multiple drivers of AI compute demand, including pre-training of larger multimodal models, post-training techniques like reinforcement learning, and inference scaling for reasoning AI that can require 100x more compute per task. The company is positioning itself to address the full spectrum of AI workloads from cloud to enterprise with its Blackwell platform. While gross margins are expected to dip initially with the Blackwell ramp, management expects them to recover to the mid-70% range later in the fiscal year as manufacturing efficiencies improve. With high margins and a wide technological edge, NVDA is undoubtedly one of the most profitable stocks in the world.
Overall, NVDA ranks first on our list of the most profitable blue chip stocks to buy now. While we acknowledge the potential of NVDA to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
