A stock of a large, established, and financially stable company with a strong reputation and long history of reliable performance. Blue chip companies typically have strong market positions and pay steady dividends. The term comes from poker chips, where blue chips were the highest value.
Apple, Johnson and Johnson, and Coca-Cola are considered blue chip stocks. These companies have been around for decades, have strong earnings, and are trusted by millions of customers. Because of their stability, some conservative investors prefer blue chips over smaller, less proven companies.
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