10 Best Blue Chip Stocks to Buy According to Hedge Funds

Published March 22, 2023 at 12:17 pm EDT Updated August 19, 2026 at 9:36 am EDT

In this article, we take a look at 10 best blue chip stocks to buy according to hedge funds.

The market is more uncertain than it has been in a while.

In early March, Silicon Valley Bank, the 16th largest bank by assets in the United States at the end of last year, failed. Later in the same month, UBS has had to buy out Credit Suisse given substantial capital flight in the latter in recent quarters.

Meanwhile, inflation is still pretty high and the Federal Reserve is expected to continue to raise interest rates.

Given the uncertainty, leading blue chips can be more attractive than average stocks.

Blue chips are established companies that are generally well known and that have substantial competitive advantages.

Many blue chips generally have an extensive history of profitability and have growth potential. Many blue chips also have considerable market capitalization that rank among the market’s largest by that metric. Furthermore, many blue chips return excess capital back to shareholders either through dividend or share buybacks or both.

Some leading blue chips in technology can also benefit from the growth of artificial intelligence as they are either make AI software like Microsoft Corporation (NASDAQ:MSFT) or they provide AI processing power like Amazon.com, Inc. (NASDAQ:AMZN). For those of you interested, check out 12 Biggest Cloud Providers by Market Share in the World.

Blue chips also face the same headwinds as the market.

If the economy slows further given the interest rate increases, blue chip stocks might not do well. If valuations in the broader market decreases, the valuations of many blue chips could decrease too.

Despite the uncertainty, some leading blue chips with competitive advantages are trading for pretty attractive valuations given the decline in the market over the past few years. Although there could be more downside in the near term, many leading blue chips could do well in the long term as the U.S. economy and global economy continues to grow.

As a result of the uncertainty, it could be a good idea for long term investors to own a well diversified portfolio of leading stocks across many different sectors.

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Methodology

For our list of 10 Best Blue Chip Stocks to Buy According to Hedge Funds, we picked 10 blue chip stocks with competitive advantages that ranked among the top 25 most widely held stocks by elite funds in our database of 943 hedge funds at the end of Q4.

We ranked each stock based on the number of hedge funds in our database that owned shares of the same stock at the end of the fourth quarter.

For those of you interested, check out 13 Best Annual Dividend Stocks to Buy Now.

10 Best Blue Chip Stocks to Buy According to Hedge Funds

10. S&P Global Inc. (NYSE:SPGI)

Number of Hedge Fund Holders: 97

S&P Global Inc. is a leading financial data provider that’s held by 97 hedge funds in our database of 943 total funds at the end of Q4. By comparison, 90 hedge funds in our database owned shares of S&P Global Inc. at the end of Q3, indicating that several more hedge funds entered into positions in the four quarter. S&P Global Inc. has substantial scale and also a strong brand, which gives it competitive advantages versus smaller competitors. In terms of valuation, S&P Global Inc. trades for a forward P/E ratio of 23.77 as of March 21. S&P Global Inc. has long term growth potential if the broader market increases in the long term as that could lead to more demand for the company’s services assuming it maintains its market share.

Alongside Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc., and Microsoft Corporation, S&P Global Inc. is a blue chip that’s widely held by many hedge funds in our database at the end of Q4.

9. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 99

The Walt Disney Company (NYSE:DIS) is a blue chip entertainment conglomerate that’s owned by 99 hedge funds in our database, ranking the stock #9 on our list of 10 Best Blue Chip Stocks to Buy According to Hedge Funds. In an increasingly digital world, The Walt Disney Company has growing digital assets with a leading streaming service in Disney+ and also a majority stake in Hulu. In terms of Disney+, the company recently increased the price by 38% in December in the ad supported streaming product with 94% of subscribers staying with the service after the price increase. With growth and price increases, management has said they expect Disney+ to be profitable sometime in fiscal 2024.

In the long term, The Walt Disney Company also has potential in the metaverse. For those of you interested, check out 10 Most Promising Metaverse Stocks to Buy.

8. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 100

JPMorgan Chase & Co. is one of the largest banks in the United States. Although shares of the stock have declined recently given the failure of Silicon Valley Bank, JPMorgan Chase & Co. has arguably gained more business as a result with more deposits moving from regional banks to JPMorgan Chase & Co.. While it might have near term downside if there are more bank failures, America’s largest bank by assets has substantial long term earnings power. 100 hedge funds in our database owned shares of JPMorgan Chase & Co. at the end of Q4, ranking it among the top 25 most widely held stocks among the elite funds we follow.

7. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 100

100 hedge funds in our database also held shares in Bank of America Corporation (NYSE:BAC) at the end of Q4, ranking it #7 on our list of 10 Best Blue Chip Stocks to Buy According to Hedge Funds. Like JPMorgan Chase & Co., Bank of America Corporation has substantial scale with total assets of $2.41 trillion, ranking second in the United States. Like other banks, Bank of America Corporation faces near term downside if the financial sector weakens further. With its substantial market share, Bank of America Corporation has attractive earnings power in the long term.

6. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 117

Salesforce, Inc. (NYSE:CRM) is an application software company that’s held by 117 hedge funds in our database at the end of the fourth quarter. For full year ended January 31, 2023, Salesforce, Inc. had $31.4 billion in revenue, up 18% year over year, and operating cash flow of $7.1 billion, up 19% year over year. Of the total revenue, subscription and support revenue were $29.02 billion, up 18% year over year, giving the company relatively more predictability in terms of sales. As of March 21, Salesforce, Inc. has a forward P/E of 21.32.

Like Salesforce, Inc., Meta Platforms, Inc., Amazon.com, Inc., and Microsoft Corporation are blue chips that are held by many hedge funds in our database at the end of Q4.

5. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 135

Apple Inc. (NASDAQ:AAPL) is the world’s largest tech company by market capitalization that is held by 135 hedge funds in our database at the end of Q4, down from 140 at the end of Q3. Although it isn’t as popular with hedge funds in our database as some of other big tech stocks, Apple Inc. nevertheless has substantial competitive advantages given its strong brand, financial strength, profitability, and substantial user base that could allow it to do well in the long term if it maintains its market share. In the middle of March, Bloomberg reported Apple Inc. is delaying some bonuses and also expanding cost reduction efforts.

4. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 152

Alphabet Inc. (NASDAQ:GOOG) is a big tech company that is facing more competition as a result of Microsoft incorporating AI into Bing. Although AI makes mistakes, many users nevertheless find the new AI Bing useful. In response, Alphabet Inc. is expected to launch multiple AI products this year, including the now open to beta testers Bard Chatbot. Given the more competition, Alphabet Inc. is arguably the riskiest stock on our list even though it has great AI technology and a forward P/E of 17.27 as of March 21.

L1 Capital International Fund commented on Alphabet Inc. in a Q3 2022 investor letter,

“Two companies, Amazon.com (Amazon) and Alphabet Inc., detracted more than 0.5% (in AUD) from the Fund’s returns. Both companies reported Q3 2022 quarterly results that were modestly below our expectations. Alphabet’s share price was impacted by concerns that macroeconomic pressures will impact advertising spend, increased commentary that Alphabet’s core search business could be disrupted by open artificial intelligence technologies, particularly from OpenAI’s ChatGPT chatbot (Microsoft is rumoured to be investing $10 billion in OpenAI with the aim of incorporating the technology into Bing, Word and email). Alphabet’s growth in employee numbers is also expected to pressure profitability in a more subdued economic environment.

We have allowed for a softening in advertising in our base case expectations and believe Alphabet’s management will be under increasing pressure to take action to manage its cost base, as many other technology businesses have already done, including Amazon. Disruption to search remains an issue to monitor. However, we consider Alphabet to be at the forefront of developments in artificial intelligence and well placed to defend its core franchise.”

3. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 194

Meta Platforms, Inc. is a social media giant that could benefit if TikTok is forced to sell itself as that would cause a distraction for TikTok management. Although it is still committed to investing tens of billions in the future in building a metaverse, Meta Platforms, Inc. has nevertheless cut costs with layoffs of around 10,000 people and the closing of 5,000 additional open roles the company hasn’t filled yet. After the restructuring, however, the company plans to lift its hiring and transfer freezes. 194 hedge funds in our database owned shares of Meta Platforms, Inc. at the end of Q4, ranking the stock #3 on our list of 10 Best Blue Chip Stocks to Buy According to Hedge Funds.

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 240

Amazon.com, Inc. is the second most popular hedge fund stock in our database with 240 hedge funds holding shares in the e-commerce and cloud computing giant at the end of Q4. Although 269 hedge funds in our database owned shares of the company at the end of Q3, Amazon.com, Inc. nevertheless has substantial growth potential in the future as AI processing will likely increase cloud processing demand. In the future, Amazon.com, Inc. could also make more of its own computing chips for AWS that could help it save more money and offer more value. Like several other big tech companies, Amazon.com, Inc. has also recently trimmed some of its workforce with around 9,000 more layoffs expected.

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Microsoft Corporation ranks #1 on our list of 10 Best Blue Chip Stocks to Buy According to Hedge Funds given 259 hedge funds in our database owned shares of the software company at the end of Q4. Although AI is still flawed in many instances, OpenAI’s ChatGPT is wildly popular and demand for the chatbot has grown substantially. Given it reportedly owns 49 percent of OpenAI, Microsoft Corporation has incorporated ChatGPT into Bing and the company will incorporate AI into many of its products in the future as well. With more AI products, Microsoft Corporation’s products could be more useful, and the company’s cloud division could also benefit from more processing demand.

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