Caution Ahead: Biggest Blue-Chips Seek Change, Innovation Post-COVID-19

The origin of the term blue-chip comes from the world of poker, where blue-colored chips are the highest available denomination in the game. In finance, however, blue-chips are among the highest valued companies.

That said, in light of the COVID-19 coronavirus which structurally challenged the operations of many established organizations, what constitutes a blue-chip company on a go-forward basis is up for debate. 

As a result, here's the case of why the following 5 blue-chips will stand the test of the current market environment. 

Boeing Co BA

In light of the 737 MAX and COVID-19 crises, Boeing pledged a turnaround both in its business model and financials, suspending dividends, trimming operations, and honing in on key issues that will help bring to market more efficient, safer airplanes.

Amazon Inc AMZN

Amazon is a ‘winner' of the pandemic that resulted in surging sales. Though the company sees profits squeezed in the near-term due to operational conflicts resulting from COVID-19, as well as legal complications surrounding its cloud business, it has a corner on the e-commerce market with its integrated supply chain and customer-first policies. Going forward, the firm will pour immense resources into furthering its artificial intelligence, data analytics, blockchain, and advertising businesses.

Facebook Inc FB

There is a debate about whether Facebook is too young to be considered a blue-chip, but the undebatable fact is that it captured almost the whole population as its userbase, and there are so many directions for it further evolve.

Further, in the near term, the company plans to trim business and spending, while honing in on new growth-focused projects. 

Visa Inc V

Though the firm bears no credit risk in providing a holistic, high-profit, infrastructure for payments, competition from alternative payment methods such as PayPal PYPL has risen, forcing Visa to hone in on further innovation, acquisitions, and growth-focused strategies.

That said, Visa is well-positioned as it is forging partnerships with up-and-coming players in payment processing rather than trying to defeat them directly. As long as it can keep participating in the industry's innovations, it should remain a blue-chip player in the payments industry.

Exxon Mobil Corporation XOM

Though energy volatility cost Exxon nearly $610 million in the first quarter of 2020, it was the firm's first quarterly loss since 1988. That said, however, the Federal Government has pledged its support of the industry and the U.S. economy is beginning to reopen. With supply decreasing and demand rising, oil price increases will help this hard-hit giant recover quickly into 2021. 

Caution Warranted

Success should never be taken for granted as even Apple Inc's AAPL investors fear the company's best days are behind it due to the lack of revolutionary products in recent years. If the companies above are to survive this unprecedented market environment, then the blue-chip status is warranted.

As always, past performance is not indicative of future results. Know your risk and stay optimistic about the future of innovation and disruption.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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