Size
Blue Chip
A blue chip is a large, established company with a history of earning money through more than one cycle.
Blue chip is a nickname, not an index rule. People mean a household company, usually large-cap, usually profitable, often a dividend payer, that has existed long enough to have disappointed and recovered. The attraction is durability. The risk is paying a quality premium that already assumes the durability continues, or mistaking size for safety.
Stocklytics treats blue chip as a large-cap screen, because size is the part of the nickname we can measure. You still have to check the balance sheet, the payout, and the price. A former blue chip that stopped earning its keep does not regain the title because the logo is familiar.
Formula
Informal: a large, established, profitable company with a long record of surviving cycles.
Live example
Apple Inc. (AAPL) last printed at $345.33 with a market cap of $5.04T. Market cap is the equity value you see above. Enterprise value would add net debt, which this quote row does not itemize.
Related
Market Cap · Dividend Aristocrat · Beta
See it on a list: best stocks · screener
Questions
Are blue chips safe?
They are less likely to disappear than a small unprofitable firm. They are fully capable of a 30% drawdown. Safe and stock are different words.
Do blue chips beat the market?
Sometimes, in some decades. The largest companies are the market, in cap-weighted indexes. You cannot all outperform yourselves.