Written by Matthew Paulson
June 1, 2018
Wall Street has a major crush on cryptocurrency markets that it just can't seem to get over. Stock investors look upon the massive gains earned by early Bitcoin and Ethereum investors with envy. They see the value in blockchain technology and distributed ledgers and want to get in on the action before the markets have fully priced in the impact that cryptocurrencies will have on the economy. While most investors won't put in the effort to open up an account with a private cryptocurrency exchange like Binance or Coinbase, there are still plenty of opportunities to get exposure to cryptocurrencies in the public markets.
Don't be fooled though. Publicly-traded companies know their stock price will skyrocket if they make a blockchain announcement, so companies like Long Blockchain Corp (formerly Long Island Ice Tea Corporation) are making spurious pivots into Blockchain technology to ride the hype train. Does anyone really think that an Ice Tea company will become a major player in cryptocurrency markets?
Fortunately, there are plenty of legitimate companies that stand to gain from the cryptocurrency mega-trend. Here are five cryptocurrency stocks that you might consider for your portfolio
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- AMD
- IBM
- Overstock
- Square
- Microsoft
#1 - AMD (NASDAQ:AMD)
Bitcoin is mined using high-end specialized hardware packages called ASICs that perform no other function than mining Bitcoin. Creators of newer cryptocurrencies like Ethereum and Dash wanted to make it so that everyone could mine cryptocurrencies, not just centralized mining facilities with specialized hardware in parts of the world with cheap electricity. They changed their hashing algorithms so that anyone with a modern computer and graphics card, like those made by AMD and Nvidia, could mine their coins.
AMD's Radeon graphics cards are preferred by cryptocurrency miners because they offer superior hashing performance to those produced by Nvidia. By targeting their products toward miners, they have significantly expanded their potential market size by creating products that can be sold to high-end computer gamers and to cryptocurrency miners.
There are plenty of other reasons to like the company as well. AMD's revenue is now steadily growing again after years of not being able to compete with rival Intel. Analysts keep raising their price targets on the stock and their financials are looking better quarter-by-quarter.
About Advanced Micro Devices
Advanced Micro Devices, Inc operates as a semiconductor company worldwide. It operates through Data Center, Client, Gaming, and Embedded segments. The company offers x86 microprocessors and graphics processing units (GPUs) as an accelerated processing unit, chipsets, data center, and professional GPUs; and embedded processors, and semi-custom system-on-chip (SoC) products, microprocessor and SoC development services and technology, data processing unites, field programmable gate arrays (FPGA), and adaptive SoC products.
Read More - Current Price
- $163.46
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 27 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $185.15 (13.3% Upside)
#2 - IBM (NYSE:IBM)
Many of us think of International Business Machines (IBM) as a relic of times past. They no longer produce personal computers and largely sell specialized technology service to Fortune 500 companies. This might not be exciting to most, but IBM has been able to introduce and scale new technologies into the Enterprise like no one else.
IBM is now focusing on democratic applications of the blockchain, allowing its customers to create networks, setup governance rules, invite members into the network and validate transactions. It has launched a consultancy for blockchain technologies teaching companies how to best use the technology and create their own blockchain networks. It has also launched a "blockchain accelerator" program to help guide businesses through the technical and legal ramifications of running blockchain networks.
IBM has also launched an open-source collaboration initiative called Hyperledger that hopes to expand the use of the blockchain in all industries. Hyperledger already has more than 130 member companies in industries spanning financial services, manufacturing and technology all working together to create a distributed ledger framework that is standardized and open.
About International Business Machines
International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate.
Read More - Current Price
- $183.77
- Consensus Rating
- Hold
- Ratings Breakdown
- 5 Buy Ratings, 6 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $178.08 (3.1% Downside)
#3 - Overstock (NASDAQ:OSTK)
The markets have been kind to Overstock (OSTK) for the last several months, primarily because of its growing focus on cryptocurrencies and blockchain technology.
One of its divisions, Medici Ventures, has quietly been working on blockchain technologies for the last three years. According to its website, Medici focuses on “six key areas of emerging crypto-industries” — capital markets, money and banking, identity, land, voting and underlying tech.
Overstock has a a number of portfolio companies dedicated to working on blockchain technology, with tZero being the most prominent. TZero will soon be launching an initial coin offering (ICO) to fund the development of SEC-compliant trade tokens as an an alternative to traditional financial markets.
About Overstock.com
Overstock.com, Inc operates as an online retailer in the United States. It offers furniture, décor, area rug, bedding and bath, home improvement, outdoor, and kitchen and dining items. The company provides its products and services through its internet websites comprising overstock.com, o.co, overstock.ca, and overstockgovernment.com.
Read More - Current Price
- $0.00
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $27.00
#4 - Square (NYSE:SQ)
Square (SQ) could be the first established payments company to fully integrate Bitcoin technology into their payments platform.
Square helps small business owners around the globe accept credit cards through point-of-sale systems and mobile card readers. Business owners might flock to the platform if they become the company that allows them to easily and seamlessly accept Bitcoin. Just about every business owner in the world wishes they had bought Bitcoin five years ago, and owning some that the receive as payments for their business will help business owners feel like they're part of the cryptocurrency mega-trend.
Square CEO Jack Dorsey has previously called blockchain the "next big unlock" and the company is actively testing Bitcoin payments in its marketplace app, Square Cash. If Square becomes the company that makes it easy to buy Bitcoin and use it for payments, it could benefit from a first-mover advantage and generate significant fee revenue from people using their platform to buy and sell the cryptocurrency.
About Block
Square, Inc provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions.
Read More - Current Price
- $73.12
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 27 Buy Ratings, 5 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $84.41 (15.4% Upside)
#5 - Microsoft (NASDAQ:MSFT)
Microsoft's (MSFT) Azure cloud computing arm hopes to offer the first mainstream blockchain solution to enterprise businesses. The company is now selling new distributed ledger infrastructure and offering several different blockchain apps for companies to create their own cryptocurrency networks.
According to Microsoft, “Rather than spending hours building out and configuring the infrastructure, we have automated these time-consuming pieces to allow you to focus on building out your scenarios and applications. You are only charged for the underlying infrastructure resources consumed, such as compute, storage, and networking. There are no incremental charges for the solution itself.”
About Microsoft
Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.
Read More - Current Price
- $414.58
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 36 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $430.52 (3.8% Upside)
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