In this article, we will look at the 10 Undervalued Blue Chip Stocks Analysts Recommend for Smart Investing.
Blue-chip stocks are great assets for investors looking for opportunities to grow their capital in the long term. Some call them steady oaks in the forest of finance. However, this steadiness is often tested when the broad market spirals out of control.
Over the past five days, blue-chip-heavy indices – the S&P 500 and the Dow – have posted substantial losses (as of June 19) due to market pressures. The S&P 500 has pared 0.48%, and the DJIA is down 1.32%.
Although CNN’s Fear and Greed Index indicates that the market is currently undecided on whether to be guided by fear or greed, experts think the scale may tip towards fear. Danni Hewson, head of financial analysis at AJ Bell, believes that investors hoping for a calmer market may wait longer. This is because the markets are being “buffeted by ‘Storm Donald’ as the US president’s trade policy continues to exert pressure on global companies.”
If the sentiment does switch to fear, chances are high that more blue-chip stocks will be undervalued. But in the meantime, here is a list of 10 undervalued blue-chip stocks that analysts recommend for smart investing.
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Our Methodology
To create this list, we combed through the US equity markets, focusing on blue-chip stocks. We defined a blue-chip company as one whose market capitalization is at least $50 billion. We also focused on stocks with a forward P/E less than 20 and analysts’ price target upside of more than 5%. We ensured that each stock is also popular among hedge funds. The ranking is in ascending order and based on the analysts price target.
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 Undervalued Blue Chip Stocks Analysts Recommend for Smart Investing
10. Wells Fargo & Company (NYSE:WFC)
Forward P/E as of June 19: 11.21
Analysts’ Price Target Upside as of June 19: 8.83%
Number of Hedge Fund Holdings as of Q1 2025: 88
Wells Fargo & Company (NYSE:WFC) is one of the 10 undervalued blue-chip stocks analysts recommend for smart investing. On June 18, i2i Logic, a fintech company, revealed a partnership with Wells Fargo to enhance the latter’s commercial banking services. The deal involves Wells Fargo leveraging the i2i Logic Client Intelligence Platform to deliver personalized insights to middle-market clients. The tool will harness Wells Fargo’s internal industry expertise with corporate and public data to deliver the objectives.
The i2i Logic Client Intelligence Platform will power the Wells Fargo Benchmark Intelligence. This tool generates numerous unique benchmarks to help clients assess their financial needs and identify suitable banking solutions. Wells Fargo expects the new solution to improve banker efficiency and client experience. The company is certain that the enhanced Wells Fargo Benchmark Intelligence will enable faster access to relevant insights and more tailored conversations.
i2i Logic’s technology is designed to streamline banker workflows and deepen client engagement. The platform is already in use across global time zones, including London, Melbourne, and New York.
Wells Fargo & Company (NYSE:WFC) is a diversified financial services firm. It provides banking, lending, investment, and wealth management services to individuals, small businesses, corporations, and institutions. Its products include checking and savings accounts, credit cards, mortgages, business loans, investment banking, and financial advisory services.
9. AT&T Inc. (NYSE:T)
Forward P/E as of June 19: 12.38
Analysts’ Price Target Upside as of June 19: 10.27%
Number of Hedge Fund Holdings as of Q1 2025: 87
AT&T Inc. (NYSE:T) is another stock on the list of 10 undervalued blue chip stocks analysts recommend for smart investing. On June 17, the company launched a new product, AT&T Business Voice. This is a cloud-based VoIP solution intended to retire traditional analog phone lines.
According to a statement, AT&T Business Voice has several capabilities, including converting analog signals to Internet Protocol (IP). This feature enables the solution to support critical lines like public safety phones, elevator phones, security systems, fire alarms, and fax machines. The FCC has approved the replacement solution for copper-based landlines.
Its key features include 24/7 remote monitoring, built-in battery backup, optional LTE wireless failover, spam and robocall blocking, and enhanced telephony tools. AT&T says the product’s target audience is small and medium-sized businesses (SMBs) seeking to modernize communications but want to retain existing equipment and phone numbers.
Commenting on the development, Melissa Arnoldi, EVP & GM of AT&T Business, said Business Voice “is more than an updated phone system. It’s a comprehensive solution that empowers small and medium-sized businesses to modernize their operations while maintaining reliability and security.”
AT&T Inc. (NYSE:T) is an American telecommunications and technology company. It provides consumers and enterprises with wireless and wireline services, broadband internet, and business connectivity solutions. The company’s key brands include AT&T, AT&T Fiber, and DirecTV.
8. QUALCOMM Incorporated (NASDAQ:QCOM)
Forward P/E as of June 19: 12.76
Analysts’ Price Target Upside as of June 19: 13.56%
Number of Hedge Fund Holdings as of Q1 2025: 82
QUALCOMM Incorporated (NASDAQ:QCOM) is also on the list of 10 undervalued blue chip stocks analysts recommend for smart investing. On June 17, Bank of America (BofA) adjusted its price target for Qualcomm from $245 to $200. The firm maintained a “Buy” rating for the stock.
According to BofA analysts, the smartphone market has peaked. And seeing that it accounts for the bulk of Qualcomm’s CDMA Technologies (QCT) revenues (73%), the analysts see limited near-term catalysts for the stock. The analysts also point to Apple (NASDAQ:AAPL) as a factor that poses risks to Qualcomm’s bottom line. Apple is working on in-house modems, which means lower sales for Qualcomm. The analysts forecast Apple’s contribution to Qualcomm’s handset revenues to plummet to 6% in FY2027 compared to 15% in FY2024.
Despite the lowered target, BofA analysts believe the stock is still a “Buy.” In other words, the firm sees enough upside potential to justify Qualcomm’s shares. The analysts acknowledge Qualcomm’s strong growth potential in the Internet of Things (IoT) and automotive sectors, up 27% and 59% year-over-year, respectively, in Q2 FY2025.
QUALCOMM Incorporated (NASDAQ:QCOM) is a global semiconductor and wireless technology company. It designs and supplies chips and system software for smartphones, automotive systems, Internet of Things (IoT) devices, and edge computing. The company serves major device makers like Samsung and Apple.
7. Johnson & Johnson (NYSE:JNJ)
Forward P/E as of June 19: 13.58
Analysts’ Price Target Upside as of June 19: 13.97%
Number of Hedge Fund Holdings as of Q1 2025: 91
Johnson & Johnson (NYSE:JNJ) is one of the 10 undervalued blue chip stocks analysts recommend for smart investing. On June 18, Dean Omar Branham Shirley, LLP, a Dallas, Texas-based law firm, announced an $8 million verdict against Johnson & Johnson in Suffolk County, Massachusetts. The verdict was awarded to Janice Paluzzi, an 84-year-old Massachusetts woman who developed mesothelioma, a rare and aggressive cancer linked to asbestos exposure.
According to the jury, the plaintiff’s illness arose from her decades-long use of Johnson & Johnson’s talcum powder products. The jury found that J&J’s talcum powder products contained asbestos and that a design defect in these products substantially contributed to Ms. Paluzzi’s mesothelioma. They also found Johnson & Johnson negligent in the design of the powder and that this negligence substantially contributed to her illness. As a remedy, the jury awarded Ms. Paluzzi $8 million: $5 million for past pain and suffering and $3 million for future pain and suffering.
Despite the unfavorable ruling, Johnson & Johnson’s stock is up 4.66% year to date as of June 19.
Johnson & Johnson (NYSE:JNJ) is a global healthcare company. It develops and sells pharmaceuticals, medical devices, and consumer health products. It operates through two major divisions, pharmaceutical and MedTech. Some of its key pharmaceutical products include Darzalex, Stelara, and Tremfya.
6. AbbVie Inc. (NYSE:ABBV)
Forward P/E as of June 19: 13.26
Analysts’ Price Target Upside as of June 19: 14.72%
Number of Hedge Fund Holdings as of Q1 2025: 86
AbbVie Inc. (NYSE:ABBV) is one of the 10 undervalued blue chip stocks analysts recommend for smart investing. On June 18, the company published its Phase 3 TEMPLE study results, which were positive. The study evaluated the tolerability, safety, and efficacy of atogepant (marketed as QULIPTA or AQUIPTA) compared to topiramate for the preventive treatment of migraine in adults.
Atogepant is an oral medication taken once daily to prevent migraines. It works by specifically blocking the activity of a natural messenger molecule in the patient’s body called Calcitonin Gene-Related Peptide (CGRP). When CGRP is highly active, it can trigger migraine attacks. Atogepant essentially acts like a “bouncer,” occupying the “receptors” or “docking stations” where CGRP would normally attach. As a result, it prevents CGRP from sending pain signals and significantly reduces how often migraines occur.
According to the published results, atogepant successfully met its primary endpoint. The medication demonstrated fewer treatment discontinuations attributed to adverse events (AEs) than topiramate.
AbbVie Inc. (NYSE:ABBV) is an American biopharmaceutical company with global operations. It discovers, develops, and markets medicines across several therapeutic areas, including immunology, oncology, neuroscience, eye care, and virology. Its major products include Humira, Skyrizi, Rinvoq, Imbruvica, Venclexta, Botox, and Vraylar.
5. Alphabet Inc. (NASDAQ:GOOGL)
Forward P/E as of June 19: 17.05
Analysts’ Price Target Upside as of June 19: 14.88%
Number of Hedge Fund Holdings as of Q1 2025: 227
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 undervalued blue chip stocks analysts recommend for smart investing. On June 18, Waymo, Alphabet’s self-driving division, announced a return to the streets of New York City. The move will materialize in July this year, and the primary objective is to further Waymo’s autonomous vehicle testing and mapping efforts, with long-term plans to launch robotaxi services.
Waymo will kick off the mapping and data collection exercise with human safety specialists behind the wheel. The insights will inform the company’s efforts to offer fully autonomous ride-hailing services in New York City. Waymo previously conducted preliminary mapping and data collection in Manhattan in 2021.
The move is part of Waymo’s broader expansion strategy. The company already offers commercial robotaxi services in San Francisco, Phoenix, Los Angeles, and Austin. There are plans to launch soon in Atlanta, Miami, and Washington, D.C.. Waymo aims to expand its fleet from 1,500 to 2,500 vehicles.
Alphabet Inc. (NASDAQ:GOOGL) is a global technology holding company and the parent of Google. It offers products and services across digital advertising, cloud computing, consumer hardware, and software platforms. Its core businesses include Google Search, YouTube, Android, Chrome, Google Cloud, and Google Play.
4. The Progressive Corporation (NYSE:PGR)
Forward P/E as of June 19: 16.42
Analysts’ Price Target Upside as of June 19: 16.42%
Number of Hedge Fund Holdings as of Q1 2025: 91
The Progressive Corporation (NYSE:PGR) is one of the 10 undervalued blue chip stocks analysts recommend for smart investing. On June 18, the company released the financial report for May 2025, and the numbers are exhilarating. The company’s net income posted astronomical growth, climbing by 353% to $1.065 billion compared to the same month last year.
Earnings per share (EPS) available to common shareholders increased by 352%, reaching $1.81. Other figures that posted significant growth (compared to the same month last year) include net premiums written (up 11% to $6.634 billion), and net premiums earned (up 15% to $6.715 billion). Also, pretax net realized gains on securities jumped by 79% to $211 million.
According to the company, the key driver of this growth was the increase in the total policies in force across personal and commercial lines. They grew by 16% to 37 million as of May 31, 2025.
The Progressive Corporation (NYSE:PGR) is a Mayfield Village, Ohio-headquartered property and casualty insurance company. The company operates in the US and Canada, offering personal and commercial auto insurance, homeowners and renters insurance, and specialty lines like motorcycle, RV, and boat coverage.
3. Merck & Co., Inc. (NYSE:MRK)
Forward P/E as of June 19: 8.16
Analysts’ Price Target Upside as of June 19: 27.04%
Number of Hedge Fund Holdings as of Q1 2025: 93
Merck & Co., Inc. (NYSE:MRK) is another biopharmaceutical company on the list of the 10 undervalued blue chip stocks analysts recommend for smart investing. On June 18, Jefferies analyst Akash Tewari maintained a “Buy” rating on the company. The associated price target for Merck & Co. stock remains at $138.00. According to the analyst, the key influence behind the positive outlook is the stability of Gardasil dosing recommendations.
On May 23, 2025, Merck affirmed its position regarding the current dosing regimens for GARDASIL 9. The company stated that the CDC recommendation should remain consistent with the approved product labeling until sufficient data are available for the FDA and European Commission to license an alternate dosing regimen. The currently approved 2-dose and 3-dose schedules for GARDASIL 9 were evaluated in extensive clinical studies that met regulatory agency standards and underwent extensive regulatory approval processes.
Gardasil is Merck’s second-largest product. The product’s sales in China have declined (e.g., 40% year-over-year in Q1 2025 and 3% in 2024), leading to a temporary halt in shipments from February through at least mid-2025 to manage inventory. Nonetheless, sales remain strong in other major regions like the US and Japan.
Merck & Co., Inc. (NYSE:MRK) is a global biopharmaceutical company. It develops and markets prescription medicines, vaccines, biologic therapies, and animal health products. Its key therapeutic areas include oncology, cardiometabolic diseases, infectious diseases, and vaccines, with major products like Keytruda, Gardasil, and Januvia.
2. Bristol-Myers Squibb Company (NYSE:BMY)
Forward P/E as of June 19: 7.74
Analysts’ Price Target Upside as of June 19: 27.09%
Number of Hedge Fund Holdings as of Q1 2025: 69
Bristol-Myers Squibb Company (NYSE:BMY) is the third biopharmaceutical company on the list of the 10 undervalued blue chip stocks analysts recommend for smart investing. On June 17, the company announced a quarterly cash dividend of $0.60 per share on its common stock. This is the 95th consecutive year that the conglomerate has paid a dividend.
The latest dividend is payable on August 1, 2025, a slight decline (by $0.02) compared to the previous payment in February this year. However, the payment is higher than the $0.57 per share for all four payments in 2023. In 2024, the company started the payment with a $0.60 per share dividend (5.26% higher than 2023) on February 1, which was maintained for all four payments of the year.
Bristol-Myers Squibb Company (NYSE:BMY) is a global biopharmaceutical firm. It discovers, develops, and markets prescription medicines for serious diseases in areas like oncology, hematology, immunology, cardiovascular, and neuroscience. Its leading products include Opdivo, Eliquis, Revlimid, Yervoy, and Sotyktu.
1. Adobe Inc. (NASDAQ:ADBE)
Forward P/E as of June 19: 16.33
Analysts’ Price Target Upside as of June 19: 33.66%
Number of Hedge Fund Holdings as of Q1 2025: 111
Adobe Inc. (NASDAQ:ADBE) is the top-ranking company on the list of 10 undervalued blue chip stocks analysts recommend for smart investing. On June 17, the tech giant launched a mobile version of its AI image generation app, Adobe Firefly. The company also announced new partnerships to integrate its AI tools into other platforms.
Adobe Firefly for mobile devices allows users to generate images from text prompts directly on their smartphones. This includes features like “Generative Fill,” which enables users to add or remove objects from images simply by typing descriptions. Users will have both free and paid access to the platform. Free users will utilize a certain number of free credits each month, while paid users will purchase additional credits once the free offer is depleted.
At the same time, Adobe confirmed that Figma and Snap (for Snapchat) will integrate its generative AI (GenAI) tools into their platforms. Figma and Snap users will access Adobe’s AI capabilities like those in Firefly.
Adobe Inc. (NASDAQ:ADBE) is a global software company. It develops and sells creative, document, and customer experience solutions through segments like Digital Media, Digital Experience, and Publishing. Its flagship products include Photoshop, Illustrator, Acrobat, and Adobe Experience Cloud.
While we acknowledge the potential of Adobe Inc. (NASDAQ:ADBE) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ADBE and that has 100x upside potential, check out our report about the cheapest AI stock.
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