These companies benefit from blockchain technology.
Many investors are familiar with blockchain as the underlying technology that provides security and transparency to the cryptocurrency market. However, blockchain technology has a wide range of applications outside of crypto, including decentralized finance, international payments, auditing and regulatory compliance. A growing list of companies specialize in blockchain technology, have incorporated blockchain into their businesses or benefited directly from cryptocurrency usage. Unfortunately, the extreme volatility of the cryptocurrency market makes many of these companies high-risk investments that may not be suitable for every investor. Here are seven high-quality blockchain stocks to buy that Wall Street analysts recommend.
Coinbase Global Inc. (ticker: COIN)
Investors and analysts may not agree on which cryptocurrencies will ultimately take over as the world’s preferred digital currencies. However, crypto, blockchain and the metaverse are three of the largest growth themes in technology, and cryptocurrency exchange Coinbase benefits from all three. CFRA Research analyst David Holt sees significant upside for Coinbase shares for investors who understand the high-risk, speculative nature of the business. That risk was underscored in July when the U.S. Securities and Exchange Commission launched a probe into Coinbase’s business, sending the stock plummeting. CFRA has a “buy” rating and $79 price target for COIN stock, which closed at $67.23 on Aug. 2.
Nvidia Corp. (NVDA)
Nvidia designs and produces high-end graphics cards and processing chips for personal computers, servers and supercomputers. Bank of America analyst Vivek Arya says Nvidia will play a central role in supplying the processing power for the metaverse and its digital economy. Nvidia also produces specialized chips designed specifically for cryptocurrency mining, providing additional blockchain exposure. Arya says Nvidia is well positioned for a strong 2023 as it rolls out its next-generation chips. He projects Nvidia’s annual earnings per share could roughly double to $10 over time. Bank of America has a “buy” rating and $220 price target for NVDA stock, which closed at $185.26 on Aug. 2.
Block Inc. (SQ)
Block is a financial services and digital payments company. Block is the parent of the Square payments platform for businesses and the Cash App digital payments app. The company allows Bitcoin (BTC) trading via Cash App and holds Bitcoin on its balance sheet as an alternative to cash. It also operates a Bitcoin hardware wallet, a Bitcoin mining business and an independent, Bitcoin-focused development business called Spiral. Morningstar analyst Brett Horn says Block operates a fast-growing business that may prove highly scalable. Morningstar has a “buy” rating and $104 fair value estimate for SQ stock, which closed at $79.09 on Aug. 2.
PayPal Holdings Inc. (PYPL)
Digital payments specialist PayPal is fully embracing cryptocurrency and blockchain technology. Not only can users buy and sell crypto in their PayPal accounts, but PayPal is also reportedly exploring the launch of its own stablecoin that would be backed by the U.S. dollar. Horn says 2022 weakness in PayPal’s stock price is a potential buying opportunity for long-term investors. In addition to PayPal’s bullish exposure to the e-commerce space, Horn says PayPal is still in the early stages of monetizing its Venmo peer-to-peer digital payments app. Morningstar has a “buy” rating and $135 fair value estimate for PYPL stock, which closed at $89.63 on Aug. 2.
Accenture PLC (ACN)
Accenture provides business consulting, technology and other services. Accenture’s blockchain services help customers apply and integrate blockchain technology into their business models. Holt says Accenture will continue to gain market share via its differentiated growth engine, which includes exposure to blockchain technology, security and cloud services. He says Accenture’s business is firing on all cylinders, generating double-digit revenue growth in both consulting and outsourcing. Accenture has a durable client base and a proven track record of impressive compounding earnings growth. CFRA has a “buy” rating and $365 price target for ACN stock, which closed at $302.48 on Aug. 2.
IBM Corp. (IBM)
Enterprise technology leader IBM has struggled to update its legacy business model and generate consistent growth, but recent investments in blockchain technology could play a significant role in IBM’s future. IBM Blockchain provides solutions that improve security and transparency to supply chains, international payment services, and global trade and food supplies. Bank of America analyst Wamsi Mohan says IBM is a relatively defensive turnaround-story investment given its high exposure to recurring sales, its solid balance sheet, its stable margins and its 5% dividend. Bank of America has a “buy” rating and $155 price target for IBM stock, which closed at $131.81 on Aug. 2.
Silvergate Capital Corp. (SI)
Silvergate Capital provides infrastructure solutions to the digital currency industry and operates the Silvergate Exchange Network for global payments. The network benefits from overall activity in the cryptocurrency space rather than profiting simply from rising crypto prices. Bank of America analyst Brandon Berman says Silvergate is relatively well positioned within the digital asset ecosystem because it is a regulated bank with a comprehensive risk management framework. Rising interest rates have hurt crypto prices in 2022, but Berman says higher rates will actually help Silvergate’s net interest income. Bank of America has a “buy” rating and $140 price target for SI stock, which closed at $94.54 on Aug. 2.
7 of the best blockchain stocks to buy:
— Coinbase Global Inc. (COIN)
— Nvidia Corp. (NVDA)
— Block Inc. (SQ)
— PayPal Holdings Inc. (PYPL)
— Accenture PLC (ACN)
— IBM Corp. (IBM)
— Silvergate Capital Corp. (SI)
More from U.S. News
Update 08/03/22: This story was published at an earlier date and has been updated with new information.