Blue chip

Blue chips are the biggest and most stable of the market's stocks.

Expanded Definition

Blue chips, which are so named because in poker, the blue chips have the highest value, refer to the stocks of large, well-established, stable companies. Blue chips are financially stable, with modest but significant long-term growth, and they typically sell well-established products and services.

Because of their size and their development, blue chips are believed to be less volatile and therefore less risky than other investments. Their performance often tracks the S&P 500, which itself is made up of many of the most notable blue chips.

Related Terms

• Growth stock
• S&P 500
• Value stock

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