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 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 most investors.
Here are seven high-quality blockchain stocks to buy that Wall Street analysts recommend:
|Stock||Price target||Implied upside from April 17 close|
|Nvidia Corp. (ticker: NVDA)||$300||11.1%|
|Mastercard Inc. (MA)||$415||11.3%|
|Accenture PLC (ACN)||$333||18.9%|
|International Business Machines Corp. (IBM)||$152||18.9%|
|PayPal Holdings Inc. (PYPL)||$112||44.8%|
|CME Group Inc. (CME)||$215||11.9%|
|Block Inc. (SQ)||$98||52.7%|
Nvidia is a leader in high-end graphics and mobile processors for personal computers, workstations and mobile electronic devices. The company is exposed to several different long-term technology growth trends, including artificial intelligence, cloud computing and autonomous vehicles. In addition, crypto miners supporting Bitcoin (BTC) and other proof-of-work blockchain networks use high-end Nvidia graphics cards to mine cryptocurrency. CFRA Research analyst Angelo Zino says Nvidia’s data center business has positive momentum, and investment in generative AI technology will support Nvidia’s growth outlook. He projects 11% revenue growth in fiscal 2024. CFRA has a “buy” rating and $300 price target for NVDA stock, which closed at $270.02 on April 17.
Mastercard is a credit card company that operates a technology-focused digital payment network. Mastercard provides crypto consulting services for companies, governments, merchants and financial institutions to help implement digital currency and blockchain solutions. The company recently said it is dialing back its crypto partnerships and focusing more on developing underlying blockchain technology to help build more efficient payment systems. CFRA analyst David Holt says Mastercard’s diversified business model, including card and noncard payments, positions the company to perform well in a variety of different economic conditions. CFRA has a “buy” rating and $415 price target for MA stock, which closed at $372.76 on April 17.
Accenture is a global system integrator that provides consulting, technology and other services. Accenture’s blockchain services help customers apply and integrate blockchain technology into their business models. Holt says Accenture’s diversified business model, solid balance sheet and long-term track record of industry-leading earnings growth make the stock an excellent defensive play in a slowing macroeconomic environment. He says loss of the company’s Russia business along with foreign exchange headwinds have masked Accenture’s strong underlying business momentum. Holt says Accenture will be a long-term market share gainer. CFRA has a “strong buy” rating and $333 price target for ACN stock, which closed at $279.98 on April 17.
International Business Machines 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’s turnaround effort is progressing. In addition, revenue growth and free cash flow have been improving, and the company’s solid product portfolio makes it an excellent defensive investment. Bank of America has a “buy” rating and $152 price target for IBM stock, which closed at $127.82 on April 17.
PayPal Holdings Inc. (PYPL)
Digital payments specialist PayPal is understandably fully embracing cryptocurrency and blockchain technology. PayPal customers can send and receive crypto, trade and hold crypto, and sell crypto to pay for purchases through their PayPal accounts. Bank of America analyst Jason Kupferberg says PayPal has a valuable global franchise, high earnings visibility, robust free cash flow and a sizable share buyback program. In addition, the stock is attractively valued at just 15 times forward earnings estimates, and Kupferberg says volume trends have improved in early 2023. Bank of America has a “buy” rating and $112 price target for PYPL stock, which closed at $77.33 on April 17.
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 and Ethereum (ETH) futures and options contracts. Morningstar analyst Michael Miller says CME is well positioned to benefit from rising interest rates, and renewed retail investor interest in the stock market is a growth tailwind. Miller says CME has a dominant market share of most contracts that trade on its exchange, and the launch of new futures contracts will support growth. Morningstar has a “buy” rating and $215 fair value estimate for CME stock, which closed at $192.12 on April 17.
Block is a financial services and digital payments company that owns the Square payments platform and the Cash App digital payments app. The company allows Bitcoin trading via Cash App and holds Bitcoin on its balance sheet as an alternative to cash. Block allows Bitcoin trading through its Cash App application 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 forecasts 15% Bitcoin compound annual revenue growth for Block over the next five years. Morningstar has a “buy” rating and $98 fair value estimate for SQ stock, which closed at $64.19 on April 17.