These companies embrace and benefit from blockchain technology.
Many investors are familiar with blockchain as the underlying technology that provides security and transparency to the cryptocurrency market. Blockchain technology has a wide range of applications outside of crypto, however, including decentralized finance, international payments, auditing and regulatory compliance. A growing number of companies specialize in blockchain technology, have incorporated blockchain into their businesses or benefit 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 to every investor. Here are seven high-quality blockchain stocks to buy that Wall Street analysts recommend.
Accenture PLC (ticker: ACN)
Accenture is a global professional services company that provides consulting, technology and other services. Accenture’s blockchain services help customers apply and integrate blockchain technology into their business models. CFRA Research analyst David Holt says Accenture is a high-quality investment that has several advantages in a difficult macroeconomic environment, including a loyal client base, a solid balance sheet and a long track record of above-average earnings growth. Holt says Accenture has a “differentiated growth engine,” provides best-in-class capital returns and should continue to gain market share from competitors. CFRA has a “strong buy” rating and $333 price target for ACN stock, which closed at $284.88 on Jan. 17.
International Business Machines Corp. (IBM)
Enterprise technology company 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 in supply chains, international payment services, and global trade and food supplies. Bank of America analyst Wamsi Mohan says IBM is a diversified, defensive business with many recurring revenue sources. IBM’s diversification and strong balance sheet helped the stock outperform the S&P 500 in 2022, as shares of the tech giant added 10.6% on a total return basis and the benchmark index fell 19.4%. Bank of America has a “buy” rating and $145 price target for IBM stock, meaning it doesn’t appear to have room to run after closing at $145.19 on Jan. 17. But IBM’s consistent revenue and healthy 4.5% dividend should keep it on your radar.
CME Group Inc. (CME)
CME is the world’s largest futures exchange and offers a wide range of derivatives contracts. CME provides unique ways to invest in cryptocurrency, such as Bitcoin (BTC) and Ethereum (ETH) futures and options contracts. Morningstar analyst Michael Miller says CME is a top stock pick among major market exchanges because it is a pure-play on futures trading, which has been a very lucrative business. Miller says elevated volatility in multiple asset classes and rising interest rates in 2022 boosted trading volume and created tail winds for CME’s business. Morningstar has a “buy” rating and $215 fair value estimate for CME stock, which closed at $175.99 on Jan. 17.
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. Block allows Bitcoin trading through its Cash App platform 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 Square has expanded to larger merchants, which will help prove its business model is viable. Morningstar has a “buy” rating and $104 fair value estimate for SQ stock, which closed at $75.10 on Jan. 17.
Coinbase Global Inc. (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. The so-called crypto winter crushed Coinbase’s share price in 2022, with the stock cratering 86%. Miller says the collapse of FTX damaged trust in crypto exchanges, but the elimination of a major competitor will be good for Coinbase in the long term. Morningstar has a “buy” rating and $90 fair value estimate for COIN stock, which closed at $54.14 on Jan. 17.
PayPal Holdings Inc. (PYPL)
Digital payments specialist PayPal is, understandably, 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. Bank of America analyst Jason Kupferberg says PayPal’s Venmo mobile payment app and its Braintree payment system for e-commerce companies are two key growth drivers, and its buy now, pay later volumes more than doubled over the five-day Cyber Week shopping holiday in 2022. Bank of America has a “buy” rating and $112 price target for PYPL stock, which closed at $80.18 on Jan. 17.
Mastercard Inc. (MA)
Mastercard is a credit card company that operates a technology-focused digital payment network. Mastercard’s Crypto Card program helps users enable simple, real-time use of digital currency for real-world transactions. The company also provides crypto consulting services for crypto companies, governments, merchants and financial institutions to help implement digital currency and blockchain solutions. Holt says Mastercard’s diversified financial services business model helps insulate investors from economic downturns. He says the secular global shift from checks and cash to digital and mobile payments makes Mastercard a multiyear growth story. CFRA has a “buy” rating and $395 price target for MA stock, which closed at $375 on Jan. 17.
7 of the best blockchain stocks to buy:
— Accenture PLC (ACN)
— International Business Machines Corp. (IBM)
— CME Group Inc. (CME)
— Block Inc. (SQ)
— Coinbase Global Inc. (COIN)
— PayPal Holdings Inc. (PYPL)
— Mastercard Inc. (MA)
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Update 01/18/23: This story was previously published at an earlier date and has been updated with new information.