In this article, we will take a look at the 12 best blue chip stocks to invest in according to short sellers.
“Investors Need a Reason to Buy”
While economic data may be scarce, every data point gives a new angle to the ever-uncertain economic conditions in the US. On September 12, Jason Draho, UBS Global Wealth Management Head of Asset Allocation, appeared in an interview on Yahoo Finance to discuss the market moves after the consumer price index (CPI) report was released on Wednesday.
Draho suggested how regular intra-day moves did not hold enough weight to impact or influence the Fed’s decision. However, he did acknowledge that the inflation data and Wall Street’s reaction to it make the case for a 25-basis cut, or more, in the upcoming Fed meeting.
Draho then hinted that investors are hoping for a soft landing and are looking for stronger reasons or economic cues to hold back, given that bad economic news, as of now, has not triggered investors as much. He also emphasized the need for more financial data and clarity on whether the Fed would be proactive with its rate cuts for further analysis.
Contrary to what investors wish, he believes the Fed will be rather hawkish than proactive with its rate-cutting cycle. He adds that while the market calls for 100 basis points in rate cuts by the end of this year, he does expect the Fed to signal way less.
He then shed light on supply challenges in the technology sector, hinting that demand is not the issue at the moment. He was particularly impressed by the earnings posted by AI companies. Draho expects tech companies to have strong balance sheets and strong earnings power by the end of 2024, making them attractive stocks despite the economic turmoil.
“Volatility Over the Last Several Weeks is Unwarranted”
On September 13, Andrew Krei, Crescent Grove Advisors co-chief investment officer, appeared in an interview on Yahoo Finance to share his bullish outlook on the economy and financial markets. Krei discussed the labor market trends and how they may impact the Fed’s decisions in the upcoming meeting.
Krei pressed that despite the “unwarranted” volatility over the past few weeks, the economic outlook remains favorable, with credit markets showing close to no signs of stress. Krei also shed light on the global economic backdrop, suggesting that international markets, especially Europe, Japan, and China were showing strong signs of recovery in trade and manufacturing.
As far as investment goes, Krei suggests that while mega-cap tech stocks have shown promising results, he is more bullish on stocks outside of the magnificent 7. He was particularly inclined to companies in healthcare, finance, and industrials, hinting that these sectors will benefit immensely from the easing cycle. He then suggested that investors must shift their focus to diversified stocks with lower valuations and relatively stronger risk-adjusted returns.
Whatever the state of the economy, some stocks are notorious for their strong and consistent financial results. With that, let’s take a look at the 12 best blue chip stocks to invest in according to short sellers. You can also read our piece on the best stocks to buy with little money according to analysts.
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Our Methodology
To come up with the 12 best blue chip stocks to invest in according to short sellers, we first went over multiple similar rankings, our own rankings, and ETFs to compile a list of blue chip stocks. We then found the companies with the lowest short float and ranked the top 12 with the largest number of hedge fund holders and lowest short float percentage. The stocks are sorted in descending order of their short interest.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)
12 Best Blue Chip Stocks To Invest In According to Short Sellers
12. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 96
Short % of Shares Outstanding: 0.98%
Merck & Co., Inc. (NYSE:MRK) is the 12th best blue chip stock to invest in according to short sellers. Merck & Co., Inc. (NYSE:MRK), a pharmaceutical giant in the United States, specializes in the production of vaccines and the provision of hospital care services.
Merck’s (NYSE:MRK) new drug, a pneumococcal conjugate vaccine for adults recently received approval from the FDA, a medical breakthrough for patients. The company also closed its acquisition of EyeBio, expanding its presence in the ophthalmology industry. The acquisition will help the company invent a treatment for retinal conditions. Its Animal Health segment also closed the acquisition of Elanco’s aqua business, presenting Merck & Co., Inc. (NYSE:MRK) as a leader in the animal health business.
The company benefited from its launches in the international market. In the second quarter of 2024, the company’s Human Health business grew by 11%, its Animal Health segment saw a 6% increase in sales, and its star cancer drug went up by 21% hitting $7.3 billion in sales.
Merck & Co., Inc.’s (NYSE:MRK) commitment to innovation is its competitive advantage. Earlier this year, the company launched a new vaccine for adult patients with pulmonary arterial hypertension. The vaccine was only approved by the FDA in March and reported $70 million in sales during the quarter.
Analysts are bullish on MRK and their 12-month median price target of $140 points to a 21% upside from current levels. In Q2 2024, there were 96 hedge funds that held positions in the stock with total stakes amounting to $7.76 billion. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $1.77 billion.
Baron Funds’ Baron Health Care Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its first quarter 2024 investor letter:
“Global pharmaceutical company Merck & Co., Inc. (NYSE:MRK), Inc. contributed on the continued growth of Keytruda, the company’s key asset and the leading immuno-oncology agent used to treat a variety of cancers. The FDA’s late March approval of pulmonary arterial hypertension drug sotatercept, also drove share gains. We retain conviction as Merck has started to transition from prioritizing its Keytruda franchise to building a more diversified business, with a focus on the Gardasil vaccine, pneumococcal vaccine development, and cardiovascular drug development, well in advance of the scheduled expiration of patent protection/exclusivity rights.”
11. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 86
Short % of Shares Outstanding: 0.96%
The Home Depot, Inc. (NYSE:HD) is a home improvement retailer based in the United States. The company sells tools, construction products, and appliances. The company was founded in 1979 and now owns over 2,300 stores that are located across North America.
The company vouched to expand the day it was brought to life. Its initial stores were sized at an average of 60,000 square feet and today, its stores are 105,000 square feet on average. Additionally, customers can choose from over 35,000 products in stores and 1 million products online at Home Depot, Inc. (NYSE:HD).
The company has over 475,000 associates who enable the smooth running of the company. To keep up with the industry requirements, Home Depot, Inc. (NYSE:HD) improved the tools its associates use for selling. The advancements allow associates to view customers’ activity and experience at Home Depot. Home Depot, Inc. (NYSE:HD) also launched another platform allowing associates and store leaders to have a quick digital view of a customer’s journey. As a result, associates are better able to understand the behaviors of customers, their likes and dislikes, and their buying patterns.
In the second quarter of 2024, Home Depot, Inc. (NYSE:HD) logged $43.2 billion in sales, up by 0.6% year-over-year. 86 hedge funds held the stock at the end of Q2 2024, of which, Fisher Asset Management was the largest shareholder, as of June 30. Analysts are bullish on the stock, and that may be because of the stock’s consistent financial performance.
10. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 163
Short % of Shares Outstanding: 0.94%
Visa Inc. (NYSE:V) is a multinational payment card service provider based in the United States that facilitates electronic fund transfers across the globe. The company also provides commercial patent solutions, sells cards, has virtual cards, and offers B2B payment options.
In the past quarter, Visa Inc. (NYSE:V) leveraged its proprietary services to expand its presence globally. Yape, a super app in Peru with more than 15 million users has now integrated Visa’s services to facilitate money transfers directly through mobile devices. Moreover, prominent digital wallets in Vietnam have enabled Visa cards for over 50 million users.
In the fiscal third quarter of 2024, the company logged $8.9 billion in revenue, up by 10% year-over-year. The company also grew its global payments volume by 7% and 5% in the US.
Analysts are bullish on the stock, and why should they not be? The company currently has more than 4.5 billion cards in circulation in over 200 countries. In addition to that, In the past 12 months, Visa has facilitated 296.8 billion transactions with a total volume of $15.5 trillion.
Overall, 163 hedge funds held stakes in Visa (NYSE:V) in the second quarter, with positions worth $24.9 billion. With stakes amounting to $4.4 billion, TCI Fund Management is the largest shareholder of the company, as of June 30.
Wedgewood Partners stated the following regarding Visa Inc. (NYSE:V) in its Q2 2024 investor letter:
“Visa Inc. (NYSE:V) detracted from performance despite healthy corporate results. The Company grew earnings per share +12% as payment volume growth was up +8% and cross-border payment grew +16%, adjusted for currency. There are over 4.4 billion Visa debit and credit cards in circulation generating over $15 trillion in volume over the past 12 months. There is another estimated $10 trillion in cash and check volume, globally, which we think Visa can continue to move over to its electronic payment rails. In addition, the Company has spent the past several years extending its payment capabilities into new flows of commerce, particularly for business-to-business transactions. This is another, extremely large (+$200 trillion) long-term growth opportunity for Visa that we believe investors are ignoring.”
9. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 114
Short % of Shares Outstanding: 0.9%
UnitedHealth Group Incorporated (NYSE:UNH) ranks ninth on our list of blue-chip stocks to invest in. It is a multinational health insurance and services company based in the United States. UnitedHealth Group Incorporated (NYSE:UNH) operates several subsidiaries including UnitedHealthcare Servic LLC, Optum, Change Healthcare, and United Health Foundation.
UnitedHealth Group’s (NYSE:UNH) primary goal lies in giving back to the community. In the past year, UnitedHealth’s professionals made over 2 million home visits, to identify health emergencies in patients that would have gone unrecognized otherwise.
On the financial front, UnitedHealth Group Incorporated (NYSE:UNH) logged $98.9 billion in revenue, up by nearly $6 billion. The company’s financial results were led by Optum and UnitedHealthcare. Overall, customers in the segment grew by 2.3 million to reach 29.6 million in the United States. Optum, the company’s global healthcare services provider which uses data to optimize care quality, reduce costs, and improve performance, logged $62.9 billion in revenue, up by $6 billion year-over-year.
In less than a decade, UnitedHealth Group Incorporated (NYSE:UNH) has grown its revenue from $101 billion in 2011 to $372 billion in 2023. The company currently provides health coverage to over 50 million people in the United States, a testament to its position in the industry and the value it provides to the world.
Analysts are bullish on UNH and their 12-month median price target of $620 points to a 5% upside from current levels. Overall, 114 investors were bullish on the stock at the end of Q2 2024, with total stakes amounting to $12.5 billion. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $1.57 billion.
Invesco Distributors, Inc. stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH): Like many managed care providers, United Health has come under pressure from rising medical costs and higher-than-expected utilization. The stock is currently undervalued based on our analysis. We view the company as a high-quality compounder with secular growth opportunities in the managed care segment. The US Presidential election may cause additional near-term uncertainty, but we believe United Health will be able to rebound once pricing and utilization issues normalize.”
8. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 111
Short % of Shares Outstanding: 0.89%
JPMorgan Chase & Co. (NYSE:JPM) is one of the best blue chip stocks according to short sellers. The multinational finance entity serves millions of customers in over 100 countries and territories. It specializes in investment banking solutions, risk management services, and capital-raising services to companies, institutions, and the government. Some of its subsidiaries include Chase Bank, Global Shares, Nutmeg, WePay, and Chase Paymentech, to name a few.
Financial results aside, the company is also making strides in automating internal tasks. Earlier in August, JPMorgan Chase & Co. (NYSE:JPM) launched a generative AI assistant that helps over 60,000 employees complete tedious tasks. As for customers, the company introduced in-store pay-by-face biometric payment solutions for merchants in the US. In addition to that, earlier in May, the company launched a new data-managed service for institutional investors allowing them to streamline their operating models for consistent data.
As of March 31, JPMorgan Chase & Co. (NYSE:JPM) has $4.1 trillion in assets and $3.6 trillion in assets in management, making it the largest bank in the United States, ahead of its competitors including Bank of America and Wells Fargo. JPMorgan Chase & Co.’s (NYSE:JPM) strong customer base is a testament to its financial performance. The stock was held by 111 hedge funds in the second quarter of 2024. Fisher Asset Management is the top shareholder of the company with a position worth $2.58 billion.
Carillon Tower Advisers’s Carillon Eagle Growth & Income Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its first quarter 2024 investor letter:
“JPMorgan Chase & Co. (NYSE:JPM) contributed positively to performance following solid financial results and positive guidance for the remainder of 2024. Moreover, growing chatter around rising capital markets activity likely contributed to the stock’s strong performance relative to other banks. Recall that JPMorgan has a robust capital markets franchise.”
7. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 80
Short % of Shares Outstanding: 0.82%
Johnson & Johnson (NYSE:JNJ) is a leading pharmaceutical company that ranks seventh on our list of the best blue chip stocks. Johnson & Johnson’s (NYSE:JNJ) is the producer of some top-selling drugs which include Stelaera, Darzalex, Imbruvica, Tremfya, Erleada, Uptravi, Invega, Symtuza, and Opsumit.
In the second quarter of 2024, the company reported sales of $22.4 billion, up by 4.3%. Johnson & Johnson (NYSE:JNJ) not only saw success with regulatory approvals for some medications but it also grew sales of its oncology segment by 16%, reaching $5.09 billion.
Johnson & Johnson (NYSE:JNJ) is one of the best blue chip stocks to buy because of its growth trajectory over the years across all its departments. The company is expected to deliver over 20 novel therapies and has over 50 product expansions in-store by 2030.
In addition to that, its segments are expected to grow at a compound annual growth rate of 5% to 7%, explaining why analysts are bullish on the company. Their 12-month median price target of $170 points to a 3% upside from current levels. Overall, JNJ was held by 80 hedge funds at the close of Q2 2024 and Fisher Asset Management was the largest shareholder with a position worth $1.02 billion.
6. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 92
Short % of Shares Outstanding: 0.81%
Bank of America Corporation (NYSE:BAC) is a financial services company that ranks sixth on our list of the best blue chip stocks to invest in according to short sellers. The company provides investment and wealth management services to individuals, institutions, small to medium-sized businesses, large corporations, and the government.
In the second quarter of 2024, Bank of America Corporation (NYSE:BAC) added another 278,000 net new checking accounts, bringing its fiscal half-year 2024 total to 500,000. As for the wealth management segment, the company maintained 6,100 new relationships and added thousands of small businesses in its commercial business sector. Bank of America now manages $5.7 trillion in client balances, loans, deposits, and investments in its consumer and wealth management segments.
Its financial results aside, the Tier 1 investment company is also among the top credit card issuers in the United States and has one of the best retail networks across the country. Bank of America Corporation’s (NYSE:BAC) position in the market is evident from its 69-million-individual customer base, 3,800 retail locations, and 15,000 ATMs across the United States. Overall, the company has 58 million verified digital users, with 47 million active mobile users.
Analysts are also bullish on BAC and their 12-month median price target of $45.5 points to a 17% upside from current levels. In Q2 2024, there were 92 hedge funds that held positions in the stock with total stakes amounting to $48.1 billion. As of June 30, Berkshire Hathaway was the largest shareholder with a position worth $41.1 billion.
ClearBridge Investments’ ClearBridge Value Equity Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its first quarter 2024 investor letter:
“We added several new positions during the quarter. Our largest new addition was Bank of America Corporation (NYSE:BAC), one of the world’s leading financial institutions, serving some 66 million consumer and small business clients across the U.S. as well as large corporations, financial institutions and governments globally. We believe that the interest rate pressure that Bank of America faced in early 2023 has subsided, and risks surrounding deposit outflows have abated, which should allow the company to improve its book value and capital growth as well as benefit from a rebound of capital markets activity.”
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Short % of Shares Outstanding: 0.80%
Apple Inc. (NASDAQ:AAPL), the company behind the iPhone, is one of the best blue chip stocks to invest in. Apple Inc. (NASDAQ:AAPL) also offers services such as iCloud, Apple Pay, Apple Music, and Apple TV+.
In the FQ3 2024, Apple Inc. (NASDAQ:AAPL) logged $85.8 billion in quarterly revenue, up by 5% year-over-year. Of this, the iPhone reported revenue worth $39.3 billion and Mac revenue was $7 billion, up by 2% from a year ago. Apple’s economic moat lies in its consistent financial performance. Over the past 10 years, the company has grown its revenues and net income by 8% and 10%, respectively.
In the fiscal third quarter of 2024, the company launched Apple Intelligence, a personal intelligence system backed by AI. Apple Intelligence is integrated into all new iPhone, iPad, and Mac models. With pre-orders for the iPhone 16 opening on September 16, Apple Inc. (NASDAQ:AAPL) is expected to report strong financial results for the rest of 2024.
Analysts are bullish on AAPL and their 12-month median price target of $250 points to a 12% upside from current levels. Overall, AAPL was held by 184 hedge funds in the second quarter of 2024, with total stakes worth $124.18 billion. Berkshire Hathaway is the top shareholder of the company with a position worth $84.25 billion.
Baron Funds said the following about Apple Inc. (NASDAQ:AAPL) in its second-quarter 2024 investor letter:
“This quarter we re-initiated a position in Apple Inc. (NASDAQ:AAPL), a leading technology company known for its innovative consumer electronics products like the iPhone, MacBook, iPad, and Apple Watch. Apple is a leader across its categories and geographies, with a growing installed base that now exceeds 2 billion devices globally. The company’s attached services – including the App Store, iCloud, Apple TV+, Apple Music, and Apple Pay – provide a higher margin, recurring revenue stream that both enhances the value proposition for its hardware products and improves the financial profile. Apple now has well over 1 billion subscribers paying for these services, more than double the number it had just 4 years ago. The increasing services mix has led to healthy operating margin improvement, providing more free cash flow for Apple to reinvest in the business and to distribute to shareholders. Throughout its 48-year history, Apple has successfully navigated and capitalized on major technological shifts, from PCs to mobile to cloud computing. We believe the company’s leading brand and device ecosystem position it to do equally well in the AI age, and this was the driver of our decision to re-invest. “Apple Intelligence” – the AI strategy unveiled at Apple’s recent Worldwide Developer Conference – leverages on[1]device AI and integrations with tools like ChatGPT to enhance user experiences across its ecosystem. The AI suite enables users to create new images, summarize and generate text, and use Siri to perform actions across their mobile applications, all while maintaining user privacy and security. We think Apple Intelligence can drive accelerated product upgrade cycles and higher demand for Apple services. The combination of growth re-acceleration, increasing services contribution, and thoughtful capital allocation should continue driving long-term shareholder value.”
4. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Short % of Shares Outstanding: 0.77%
Amazon.com Inc (NASDAQ:AMZN) is fourth on our list of the 10 best blue chip stocks according to short sellers. Amazon.com Inc (NASDAQ:AMZN) is a technology company that specializes in e-commerce, online retail, streaming, and data cloud services.
We call Amazon the e-commerce giant because it is on track to capture over 40% of the e-commerce market in the United States. It is also worth noting that its proprietary cloud service, Amazon Web Services (AWS), increased its revenue by 17.2%, year-over-year in Q1 to 18.8% in Q2.
Amazon.com Inc (NASDAQ:AMZN) can also be considered a rising AI star. Over the past few months, the company has not only partnered with AI startups and the US government, but it has also been actively investing in the development of AI chips. Its AI journey does not end here. The tech company has powered its e-commerce platform with AI to help customers shop, and receive intuitive product recommendations, and ideal price packages.
Analysts are bullish on AMZN and their 12-month median price target of $220 points to an 18% upside from current levels. Overall, AMZN was held by 308 hedge funds at the close of Q2 2024 with total stakes amounting to $65.85 billion. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $8.46 billion.
Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Among our top individual contributors in Q2 were Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Internet retail and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. Shares also received a boost amid growing optimism around the demand for AWS as Amazon customers’ investments in generative AI projects continue growing.”
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Short % of Shares Outstanding: 0.74%
Microsoft Corporation (NASDAQ:MSFT) is one of the biggest technology companies in the world that develops productivity and business suite applications, cloud products, and personal computing products. It ranks third on our list of the best blue chip stocks according to short sellers.
The company’s chairman and CEO, Satya Nadella attributes Microsoft’s financial performance to its market-competitive platforms and cloud services. In the fiscal fourth quarter of 2024, Microsoft Corporation (NASDAQ:MSFT) reported revenue worth $64.7 billion, up by 15% year-over-year. During the same quarter, Microsoft Cloud, its most popular service, logged $36.8 billion in quarterly revenue, up by 21% year-over-year, and had record bookings.
The blue-chip stock is also a leader in artificial intelligence technology. Its AI-backed cloud service, Azure OpenAI service witnessed an increase in its customer base by 60%, reaching 60,000 clients in the second quarter of 2024. Microsoft’s investments in forging strategic alliances are worth mentioning. Previously, the company partnered with Lumen Technologies and Palantir to dominate the AI space and manage workloads on its proprietary cloud service, AWS.
Overall, Microsoft Corporation’s (NASDAQ:MSFT) financial strength coupled with its strategic partnerships explains why 279 hedge funds held positions in Microsoft (NASDAQ:MSFT) at the end of Q2 2024. Of those, the Bill & Melinda Gates Foundation Trust was the most dominant shareholder in the company.
Baron Opportunity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q2 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years, it has built a $135 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. The stock contributed to performance because of continued strong operating results and investor enthusiasm regarding Microsoft’s leadership across the secular megatrends of AI and cloud computing. Recent business momentum continued to show evidence of the strength and attractiveness of Microsoft’s product portfolio among its customer set: (1) Azure OpenAI – its suite of AI services – is now used by 65% of the Fortune 100 and contributed 7% of Azure revenue (an annualized run rate of $5.2 billion); (2) GitHub Copilot – its AI code writing service – is bending the productivity curve for developers (reports of 40%- plus improvements in developer efficiency) and now has 1.8 million paid subscribers, with growth accelerating to over 35% quarter-over-quarter; and (3) Copilot Studio – its AI application service that makes it easier for anyone to build an application, automate a workflow, or create a Copilot using natural language. 30,000 organizations across every industry have used Copilot Studio to customize Copilot for Microsoft 365 or build their own, up 175% quarter-over-quarter. In the March quarter, Microsoft again reported better-than-expected financial results, highlighted by Microsoft Cloud growing 23% year-over-year, with the fastest commercial bookings in six quarters, and Azure accelerating to 31% constant currency growth, up from 28% in the previous quarter. June quarter guidance came in-line with consensus, but the company provided higher guidance for the most important segment, Intelligent Cloud, on the back of continued strong trends across Azure and Azure OpenAI. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes.”
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Short % of Shares Outstanding: 0.57%
Berkshire Hathaway Inc. (NYSE:BRK-B) is a multinational conglomerate company that operates in the financial services, insurance, energy, transportation, rail, and utility industries. The company not only provides services across several insurance lines, but also engages in the generation and distribution of electricity from natural gas, coal, wind, solar, and nuclear sources. Berkshire Hathaway also retails household appliances, electronics, kitchenware, and motorcycle equipment.
The company boasts a reliable source of income from its stable operating businesses. In the second quarter of 2024, Berkshire Hathaway Inc. (NYSE:BRK-B) logged $93 billion in revenue, of which $26 billion came from insurance. In addition to that, the company has ownership rights and control over multiple major companies. According to the company’s latest shareholder letter, it currently owns 6% of the entire universe in which it operates.
Insurance underwriting and insurance investment income were the two primary segments of the company in FY 2023, reporting $5.4 billion and $9.6 billion in operating earnings, respectively. Its railroad segment was the third largest segment, with operating earnings worth $5 billion.
Berkshire Hathaway Inc. (NYSE:BRK-B) is one of the best blue chip stocks and we say that because the company has strong roots in multiple industries diversifying its risk. According to our database, 120 hedge funds held stakes in Berkshire Hathaway Inc. (NYSE:BRK-B) and the Bill & Melinda Gates Foundation Trust was the largest shareholder of the company, as of June 30.
1. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 95
Short % of Shares Outstanding: 0.5%
Walmart Inc. (NYSE:WMT) is one of the biggest retail companies in the world and the best blue chip stock on our list. It operates retail outlets, wholesale units, and e-commerce sites in more than 20 countries that serve more than 240 million customers every week.
The company has notoriously high speeds of delivery due to its massive network. It currently operates 210 distribution centers and has a private fleet of 9,000 tractors, 80,000 trailers, and 11,000 drivers, all of which enabled the company to deliver 30% of orders within 3 hours over the past 12 months in the United States. In addition to that, Walmart reported $100 billion in e-commerce sales in the fiscal year 2024, up from $73 billion in FY 2022.
Walmart Inc. (NYSE:WMT) is consistently improving, and we say that because of its investments in technology and expansion. In FQ1 2025, the company launched an AI-backed platform allowing customers to receive product recommendations based on their likes and dislikes. As for its brick-and-mortar stores, by the end of FY 2026, the company projects more than half of its stores and fulfillment centers to be run by automation.
Walmart is also a favorite among sellers, as evidenced by a 36% growth in sellers on its marketplace in the fiscal first quarter of 2025. In addition to that, the company is on track to add a staggering $130 billion in sales if it achieves its 4% sales growth target over the next five years.
Overall, WMT ranks first among the 12 best blue chip stocks to invest in according to short sellers. While we acknowledge the potential of retail companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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