A blue-chip stock is a share of a large, established company with a history of reliability.
The phrase comes from poker, where blue chips traditionally have the highest value. In investing, it generally refers to companies with strong reputations, durable businesses, substantial market values, and long operating histories. Many blue-chip companies have also paid dividends over extended periods, although dividend payment is not an absolute requirement.
Blue-chip is a descriptive market term rather than a formal legal classification. There is no single global list that determines which stocks qualify. Definitions can vary by investor, index provider, country, and time. A well-known company can still face competition, falling profits, debt problems, or a declining share price.
Blue-chip stocks are often contrasted with penny stocks or microcaps, which usually represent smaller and less established businesses. Their reputation does not make them risk-free, and diversification remains important even when investing in widely recognized companies.