• The term "blue chip" comes from the game of poker, where blue chips are the highest value pieces.
• A company must be well-known, well-established, and well-capitalized to be a blue chip.
• Membership in certain stock indexes is important for determining blue chip status.

A blue chip stock is the stock of a blue chip company. If a stock is considered blue chip, it is generally the market leader or one of the top performers in its sector. Typically, a blue chip stock is a component of major stock market averages and indexes, such as the S&P 500 index in the United States. In fact, it could even be argued that a U.S. stock must be a member of the S&P 500 in order to be a blue chip.

In the investment world, a blue chip company is well-known, well-established, and well-capitalized. Such a company is considered to be a leading company in its sector and produces dominant goods or services. Blue chip companies are usually better prepared to survive during economic downturns due to their consistent revenues and stable growth over time.