Investing in Large-Cap Stocks

Large-cap stocks include many of the best-known companies in the world, and although they might not be as exciting as smaller companies with high growth potential, they are typically a safer investment. Explore the world of large-cap stocks and learn how these can shape your portfolio.

Overview

What is a large-cap stock?

A large-cap stock is the stock of any publicly traded company valued at more than $10 billion. Sometimes called big-cap stocks, large-cap stocks are often considered the stalwarts or blue chips of the stock market. Think of companies such as Walt Disney (DIS -0.75%), Coca-Cola (KO -0.45%), and General Motors (GM 0.42%) -- established giants with leading positions in their industries.

The very largest large-cap companies, such as Amazon (AMZN -1.46%) and JPMorgan Chase (JPM -3.11%), which have market caps of more than $200 billion, also fall into the large-cap category. Some investors think of them as a separate type of stock, called mega-caps, but, for most purposes, they’re just "jumbo" large-caps.

While many investors consider smaller, fast-growing companies to be more exciting, large-cap stocks can be very profitable for investors who take the time to understand them. Because these mammoth companies tend to be less volatile than their smaller siblings, they can also help to diversify a portfolio of smaller stocks while still providing good share price growth over time. Their principal advantage is that they are a safer investment since they are more established than smaller companies and have competitive advantages and more reliable profit streams. For that reason, large-cap stocks tend to outperform small-caps during a bear market.

There is a range of large-cap growth stocks that investors can choose from, including stocks such as e-commerce giants like MercadoLibre (MELI 0.0%) to chipmakers like Nvidia (NVDA -2.78%). There is no strict definition for a growth stock, but, in general, any company increasing its revenue by 20% or more can be considered a growth stock.

Large-cap growth stocks are the exception, however, since most large-cap stocks are mature companies with moderate growth prospects. Investors seeking high growth potential may prefer to invest in smaller companies at the lower end of the market cap range.

Large-cap companies are typically older and well-established, and they usually pay reliable dividends. Not all are household names, but many are well-known. The large-cap blue chip stocks are stable businesses with respected management teams, strong credit ratings, and long histories of profits. Others, generally industrial giants, are characterized by their business cycles, meaning that their profits and stock prices tend to move with the overall economy. Some large-cap companies are fast-growing and may have been in the mid-cap or small-cap range just a few years ago.

Large-cap stocks have outperformed their smaller peers over the past decade. They have also done so with less volatility since, for example, the S&P 500 didn’t drop as much as the Russell 2000 when the COVID-19 pandemic emerged in early 2020.

Top large-cap stocks

Top 7 large-cap stocks in 2025

Here are some excellent large-cap stocks to consider:

1. Nvidia

Nvidia (NVDA -2.78%) has led the artificial intelligence (AI) boom, and it's clear why. The company makes an estimated 98% of data center graphics processing units (GPUs), or the building blocks of AI, dominating the industry.

Nvidia also continues to push its advantage, launching the Blackwell platform in late 2024, and is working on its next iteration, Rubin.

Nvidia's dominant market share comes because it has had an edge in GPUs since it created the first one in 1999. It has also invested in a surrounding ecosystem to differentiate itself and make it sticky with enhancements like the CUDA software library, which gives developers pre-built applications to work with.

Nvidia has so far fended off challenges from Advanced Micro Devices (AMD -6.63%) and Intel (INTC -0.57%) in AI GPUs and related components, and it looks poised to continue to capitalize on the AI boom.

2. MercadoLibre

MercadoLibre (MELI 0.0%), Latin America’s largest e-commerce site business, is a great example of a large-cap company that is still growing quickly. MercadoLibre has a number of similarities to Amazon with its leading e-commerce business and shipping network in MercadoEnvios, but it also has unique solutions for Latin America, including providing point-of-sale machines for brick-and-mortar merchants.

That’s one component of the company’s fast-growing payment tool, MercadoPago. Originally a service like PayPal (PYPL -0.35%) for MercadoLibre shoppers, it has grown to become something of a multinational bank in Latin America, where it’s used to make payments at places such as grocery stores and gas stations.

3. Walmart

Walmart (WMT -0.42%) is the world’s biggest retailer, as well as the world’s largest company by revenue. It has many competitive advantages, including economies of scale that work in its favor, a reputation for low prices, and stores within 10 miles of 90% of the U.S. population.

But what makes the company more than just a reliable dividend payer is the fact that Walmart is becoming more than just a retailer. The company is leveraging its physical footprint to provide easy pick-up options for e-commerce orders. It has built a formidable e-commerce business that ranks second in the U.S. behind Amazon, giving it a valuable stake in a rapidly growing market. It's also expanding to higher-margin businesses like its e-commerce marketplace, made up of third-party sellers, and digital advertising on its website. With the company clearly evolving, Walmart could be a much different business in five or 10 years.

With its reputation for low prices, Walmart is also well-prepared to endure a recession or economic downturn, giving it an advantage over many of its peers.

4. Apple

Apple (AAPL -0.16%) has one of the best-known brands in the world. In fact, according to some measurements, it's the most valuable brand in the world.

The company is synonymous with digital devices, dominating categories like smartphones, tablets, laptops, and wearables like the Apple Watch and AirPods.

Apple's core business has been slow to grow as categories like smartphones are mature now, but the company has been able to grow its bottom line thanks to its services business, which monetizes its installed base of more than 2 billion devices, through revenue streams like the App Store, Apple Pay, Apple Music, and other subscription-based businesses.

It's also steadily repurchased its stock, helping to lift its earnings per share.

5. Tesla

Tesla (TSLA 3.59%) pioneered the electric vehicle, and it's still the leading EV maker in much of the world, though sales growth has slowed considerably.

In 2024, the company reported a decline in vehicle unit sales, and it's on track to do the same in 2025.

The company has said it's been through two phases of its evolution as it goes from an electric vehicle maker to an AI company with ambitions of launching robotaxi networks around the world and its Optimus autonomous robot.

Tesla launched its robotaxi service with a handful of vehicles in Austin, Texas, in June. Based on the initial debut, it seems like an expansion of the service is going to be slower than some investors might like.

6. Berkshire Hathaway

Few companies on the stock market are as synonymous with long-term excellence as Berkshire Hathaway (BRK.A -1.26%)(BRK.B -1.4%).

The company was founded by Warren Buffett and led by him for more than 60 years has a long track record of outperforming the S&P 500, having almost doubled its annual return during that period.

Berkshire Hathaway has a unique business model, operating as a holding companies that owns individual stocks and subsidiaries ranging from industries like consumer products to insurance to manufacturing, and utilities.

7. Amazon

Amazon (AMZN -1.46%) has become one of the most valuable companies thanks to its leadership in two massive industries: e-commerce and cloud computing.

It pioneered both industries, starting off as an online bookseller at the dawn of the World Wide Web, and today sells around 600 million stock-keeping units (SKUs), thanks to its e-commerce marketplace, which is far more than any of its peers.

The company believes there's still a lot of growth in both of those markets, and it has also leveraged those competitive positions into new businesses like advertising, which now brings in billions in profits every year.

Best large-cap funds

Best large-cap funds in 2025

If you don't want to choose individual large-cap stocks, you can still gain portfolio exposure to the biggest companies by investing in an exchange-traded fund (ETF) or a mutual fund that focuses on large-cap stocks -- or even large-cap growth funds.

An ETF trades on an exchange like a stock, but it is made up of a group of stocks that typically have something in common; for example, they belong to the same industry.

ETFs give investors an easy way to invest in a group of stocks rather than picking individual stocks. They generally charge a small fee to invest in them, known as the expense ratio.

Here are a couple of large-cap-focused funds to consider:

1. Vanguard S&P 500 ETF

Vanguard S&P 500 ETF (VOO -0.35%) is an ETF that tracks the performance of the S&P 500. Vanguard invented the index fund in the 1980s, and the funds that track the S&P 500 are still the most popular. With an expense ratio of just 0.03%, the fund is basically fee-free, making it a great option for new investors or people who prefer a passive approach to investing in large-cap stocks.

2. Fidelity Contrafund

Fidelity Contrafund (NASDAQMUTFUND:FCNTX) is a mutual fund that invests in large-cap and mega-cap stocks, typically focusing on large-cap stocks with attractive potential for long-term earnings growth. With an expense ratio of 0.86%, it’s much more expensive than the typical index fund, but the fund is actively managed, meaning that its manager hopes to beat the performance of the S&P 500. The outperformance, at least in theory, is more than enough to offset the higher fees.

How to evaluate

How to evaluate top large-cap stocks

Great large-cap stocks come in different varieties. Some are former small-cap growth stocks that just kept growing, such as MercadoLibre; some, such as Nvidia, are longtime players in industries that are difficult to enter at scale; and some, such as Walmart, are versatile giants with long traditions of strong management and steady growth.

Below is a list of steps to take to evaluate large-cap stocks.

• Define your investing goals. Are you most focused on growth, income, or value, or a combination of any of the three?
• Use a stock screener to find companies with a history of outperformance and companies that trade at good valuations.
• Make a list of companies that offer good growth or income prospects for their stock valuation.
• Learn about the competitive landscape in their industry, their growth strategy, management, and risks facing the company.
• Once you've identified stocks that look set to outperform, decide on how much of your portfolio you want to allocate to them.

Related investing topics

Reasons to invest

Reasons to invest in large-cap stocks

If you can hold an investment for five years or more, and you want stocks with relatively low volatility, then large-cap stocks might be a good fit. If your portfolio is dominated by volatile growth stocks, then adding a few stable large-caps might be a smart move to diversify your holdings without significantly sacrificing growth potential.

Remember that although large-cap stocks are often those of companies that “everybody knows,” it’s still important to do your homework before you buy. Another option is to add an ETF or mutual fund focused on large caps to your holdings.

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