Blockchain is a huge investment opportunity.
Cryptocurrencies have been one of the more controversial topics on Wall Street in the past couple of years. However, technology experts say there’s no arguing the value of the blockchain infrastructure at the root of currencies like bitcoin. The innovative part of the complicated blockchain system is its reliance on distributed ledger technology to independently verify transactions. Bank of America analyst Kash Rangan says blockchain systems will eventually be embedded in every software platform, making it an incredibly valuable investment opportunity. Blockchain is a new technology, but the following seven companies already have blockchain offerings on the market.
IBM (ticker: IBM)
According to Rangan, IBM has fully embraced blockchain technology. Rangan says IBM’s Hyperledger Fabric blockchain operates on a scalable, low-latency infrastructure and includes 35 live networks and more than 400 engaged clients. IBM has more than 1,500 employees devoted to blockchain technology, and its Hyperledger developers have created 5 million lines of code. IBM is tackling what it sees as $400 billion in market inefficiencies that blockchain could address. Rangan estimates blockchain alone already contributes more than $7 in per-share value for IBM. Bank of America has a “buy” rating and $200 price target for IBM stock.
Microsoft Corp. (MSFT)
Microsoft has been exploring blockchain technology since 2015. Its blockchain-as-a-service offerings for Azure aim to help companies improve the security of their business transactions by leveraging the power of the blockchain model. Microsoft is an exclusive partner with India’s BankChain, a consortium of banks utilizing blockchain technology to fight money laundering, financial terrorism and customer fraud. Microsoft has also partnered with Groupe Renault to create the first tamper-proof and secure digital car maintenance ledger that operates on a blockchain system. Bank of America has a “buy” rating and $134 price target for MSFT stock.
Oracle Corp. (ORCL)
Oracle offers Blockchain Cloud Service solutions as part of its platform-as-a-service portfolio. Oracle BCS applies blockchain technology to help applications securely and accurately perform identity authentication, information sharing, single sign-on, smart contract creation and other tasks. Oracle says BCS creates value by accelerating transactions and reducing costs. Oracle has also been part of the Hyperledger Fabric project for over a year. The company is currently collaborating with Infosys (INFY) to develop BCS for enterprises, which will help companies improve transaction privacy and database interoperability. Bank of America has a “neutral” rating and $55 price target for ORCL stock.
Red Hat (RHT)
Red Hat was one of the founding members of the Hyperledger project. The company’s OpenShift Blockchain initiative is geared toward assisting customers in creating hosted blockchain apps by using independent software vendor tools and Red Hat’s managed support services. Red Hat is also partnered with BaaS provider BlockApps. BlockApp’s STRATO development platform allows customers to quickly and easily develop blockchain applications on Red Hat products and enable blockchain capabilities via OpenShift. Unfortunately, Rangan says the stock is fully valued at its current price. Bank of America has an “underperform” rating and $130 price target for RHT stock.
VMWare recently launched Project Concord, a scalable, energy efficient open-source blockchain infrastructure. Scalability has been one of the primary concerns about many current blockchain infrastructures, and VMware is attempting to address that problem by modifying the Byzantine Fault Tolerance consensus algorithm that is often used by blockchain networks. Finally, VMware’s Blockchain on Kubernetes allows customers to create an environment to easily build and test blockchain applications. Rangan says VMware should grow revenue by at least 15 percent annually. Bank of America has a “buy” rating and $190 price target for VMW stock.
Salesforce doesn’t technically have blockchain products on the market just yet, it hopes to unveil blockchain and cryptocurrency solutions by its Dreamforce 2018 event in late September. However, blockchain company Dapps.ai is already natively integrated into Salesforce.com, providing a blockchain development platform that allows companies to incorporate their business processes into a blockchain of their choosing, including the Hyperledger, ethereum and bitcoin blockchains. In addition, Rangan says Salesforce is gaining cloud market share and improving its margins. Bank of America has a “buy” rating and $181 price target for CRM stock.
Nasdaq may not be the typical Silicon Valley tech company, but it has long been an innovator when it comes to applying new technology to global securities transactions. In fact, Nasdaq announced its first securities transaction on the Nasdaq Private Market utilizing blockchain technology in 2015. Nasdaq is hoping its Nasdaq Linq blockchain platform will ultimately provide the type of efficiencies that will open the private securities market to investors around the world for the first time. Bank of America has a “neutral” rating and $96 price target for NDAQ stock.
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