Web 3.0 — also referred to as the decentralized web or Web3 — is getting plenty of attention on Wall Street. Some regard it as a paradigm shift that will make the internet immersive for the masses. Others highlight, “Web3 is about ownership. It’s about the direct connection between creators and consumers, obfuscating the gatekeepers.” Naturally, Web 3.0 stocks are catching the eyes of investors as a result.
Over the past decade, tech giants like Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Meta Platforms (NASDAQ:FB) have dominated the Web 2.0 ecosystem as those gatekeepers. You might think of Web 2.0 as “the version of the internet most of us know today. An internet dominated by companies that provide services in exchange for your personal data,” according to the Ethereum (CCC:ETH-USD) platform.
The Web 3.0 ecosystem seems to focus on taking some of the power back from these companies. In recent years, blockchain technology, which first came into our daily lives via cryptos led by Bitcoin (CCC:BTC-USD), has already allowed web users to decentralize power structures in part installed by the big tech.
Web 3.0 promises to offer user-specific, peer-to-peer (P2P) internet services with no single authority. It aims to be a more decentralized and transparent version of today’s internet where people gain control over their data. Of course, this transformation has enormous implications for Web3 stocks.
With that information, here are seven Web 3.0 stocks to buy for lucrative long-term returns:
- Advanced Micro Devices (NASDAQ:AMD)
- Apple (NASDAQ:AAPL)
- Block (NYSE:SQ)
- Coinbase Global (NASDAQ:COIN)
- Nvidia (NASDAQ:NVDA)
- Twitter (NYSE:TWTR)
- Unity Software (NYSE:U)
Web 3.0 Stocks: Advanced Micro Devices (AMD)
52-week range: $72.50 – $164.46
Advanced Micro Devices (AMD) is one of the semiconductor designers racing to develop the most powerful artificial intelligence (AI) computing and graphics chips for Web 3.0. At present, most of AMD’s revenue comes from central processing unit (CPU) and graphics processing unit (GPU) sales.
AMD announced fourth-quarter 2021 results on Feb. 1. Revenue increased 49% year-over-year (YOY) to $4.8 billion. Net income came in at $1.1 billion, or 92 cents per diluted share, up from $636 million in the prior-year quarter. Cash and equivalents ended the quarter at $3.6 billion.
The chip heavyweight recently gained approval from China for its $35 billion acquisition of the semiconductor designer Xilinx (NASDAQ:XLNX). The transaction adds significant AI capabilities to AMD’s offerings. Analysts expect it to gain a strategic foothold in Web 3.0 markets, such as networking infrastructure and automotive technology.
Bank of America anticipates AMD will gain 25% of the server market by the end of 2022. Meanwhile, its cutting-edge Epyc processors continue to take away from Intel’s (NASDAQ:INTC) share in the data center market. AMD’s management anticipates sales to grow 31% YOY and reach $21.5 billion in 2022.
AMD has a premium price tag at $131, up 44% over the past year. The recent tech stock selloff led to a 9% decline year-to-date (YTD). Shares are trading at 29.6 times forward earnings and 9 times trailing sales. The 12-month median price forecast for AMD stands at $157.
52-week range: $116.21 – $182.94
Dividend Yield: 0.5%
With its mobile communication and media devices as well as personal computers, Apple has been a darling of tech consumers for many years. Meanwhile, management is taking steps to transform the tech giant into an infrastructure layer for Web 3.0 development.
For instance, blockchain tools such as cryptocurrency wallets expect users to have smartphones. And with more than a billion users, Apple currently has about a quarter of the smartphone market. Therefore, its customer base will always be coveted by Web 3.0 developers.
Apple released Q1 FY22 results on Jan. 27. The company reported an all-time record revenue of $123.9 billion, up 11% YOY. Net income was $34.6 billion, or $2.10 per diluted share, compared to $28.8 billion, or $1.68 per diluted share a year ago. It ended the quarter with $63.9 billion in cash and marketable securities.
On the results, CFO Luca Maestri remarked, “The very strong customer response to our recent launch of new products and services drove double-digit growth in revenue and earnings, and helped set an all-time high for our installed base of active devices.”
AAPL stock currently hovers around $175, up 26% over the past 12 months. Shares are trading at 28.9 times forward earnings and 7.6 times trailing sales. The 12-month median price forecast for Apple is $192.
Web 3.0 Stocks: Block (SQ)
52-week range: $99.81 – $289.23
Next on our list is the financial technology (fintech) giant Block, formerly known Square. Its ecosystem provides solutions for point of sale (PoS), P2P payments and cryptocurrency. Its peer-to-peer payments platform Cash App has contributed to the company’s growth significantly.
The development of a decentralized Web 3.0 that ensures data security and privacy should further boost growth in this ecosystem. Moreover, CEO Jack Dorsey is expected to allocate a significant portion of Block’s revenue to invest in Web 3.0-related new ventures.
The fintech group announced Q3 2021 results in early November. Net revenue of $3.84 billion was up 27% YOY. Net income came in at $84,000, down from $36.5 million in the prior-year quarter. Cash and equivalents ended the quarter at $4.5 billion.
SQ stock trades slightly above $110, down 56% over the past 12 months. Block shed more than half its value in the past three months. Shares are currently at historically cheap levels at just 3.3 times trailing sales. The 12-month median price forecast for Block stock stands at $230.
Coinbase Global (COIN)
52-week range: $162.20 – $429.54
Coinbase Global, one of the leading cryptocurrency exchanges, has around 75 million users. Management has also announced plans to launch a non-fungible token (NFT) platform in the near future. Coinbase’s venture capital (VC) fund supports Web 3.0 infrastructure companies, including the blockchain network Solana (CCC:SOL-USD), BlockFi and other decentralized finance projects.
The exchange reported Q3 2021 results in early November. Revenue increased 330% YOY to $1.23 billion. Net income soared to $406 million, or $1.62 per diluted share, up from $81.3 million in the prior-year quarter. Cash and equivalents ended the period at $6.35 billion.
Coinbase is an attractive Web 3.0 stock. It plays a vital role as a centralized exchange that investors can trust with their cash, cryptocurrency and NFTs. However, its near-term valuation relies mostly on the mainstream adoption of crypto.
COIN stock currently sells for around $215, down 16% YTD. It has plunged about 50% from its all-time high due to the recent dip in the crypto market. As a result, shares offer better value at 24.9 times forward earnings and 6.5 times trailing sales. The 12-month median price forecast for Coinbase stock stands at $346.
Web 3.0 Stocks: Nvidia (NVDA)
52-week range: $115.67 – $346.47
Dividend Yield: 0.1%
Wall Street regards Nvidia as the undisputed leader in advanced semiconductor design and software for next-generation computing development. The chipmaker is well-known for its chips used in gaming and data centers.
Nvidia’s technology is primed to power the future of Web 3.0. For instance, its chips allow crypto miners to provide essential tasks that run blockchain networks.
The chipmaker is now developing advanced AI chips that run new Web 3.0 applications and platforms. In addition, the company has recently launched Nvidia Omniverse, a platform designed for Web 3.0 developers to build their metaverse products.
Analysts are also keeping an eye on its work regarding deep learning systems that can handle natural language processing required by Web 3.0. Deep learning is a subdivision of AI and machine learning utilizing “multi-layered artificial neural networks to deliver state-of-the-art accuracy in tasks such as object detection, speech recognition, language translation, and others.”
Nvidia announced Q3 2022 results on Nov. 17. Revenue surged 50% YOY to $7.1 billion. Net income increased 62% to $2.97 billion, or $1.17 per diluted share. Cash and equivalents ended the period at $1.29 billion.
NVDA stock is changing hands around $265, up about 84% over the past year. Yet this year, it is down more than 10%. Shares are trading at 46.5 times forward earnings and 25 times trailing sales. The 12-month median price forecast for Nvidia stock stands at $350.
52-week range: $32.05 – $80.75
Our next Web 3.0 stock is the microblogging platform Twitter. Analysts point out how important it will be to reach an audience in the upcoming decentralized world. Since Twitter facilitates the organic development of niche communities, it already enjoys a key competitive advantage among social media names.
Twitter released Q3 2021 results in late Oct. Revenue increased 37% YOY to $1.28 billion. Net loss came in at $537 million, or a 67 cent loss per diluted share, compared to a net income of $29 million in the prior-year quarter. Cash and equivalents ended the period at $3.5 billion. Shareholders were not pleased with these results, and did not hesitate to hit the “sell” button.
The social media platform recently announced that subscribers to Twitter Blue could display their verified NFTs in their timeline as hexagon-shaped profile pictures. This step has created significant buzz among NFT aficionados. Recent research suggests the market could reach $80 billion by 2025.
TWTR stock hovers around $37, down almost 42% over the past 12 months. YTD, they are down nearly 13%. Compared to last year, shares are offering better value at 27 times forward earnings and 5.7 times trailing sales. The 12-month median price forecast for Twitter is $51.50.
Web 3.0 Stocks: Unity Software (U)
52-week range: $76 – $210
Our final stock for today, Unity Software, offers a platform to develop real-time 3D content for mobile phones, PCs and augmented reality (AR) devices. A large number of video games depend on Unity’s engine.
Therefore, Unity has become an attractive bet to capture the potential of Web 3.0. Its platform offers underlying architecture for developing and participating in the metaverse, a market that cold go well over $800 billion in 2028.
Unity reported Q4 2021 results on Feb. 3. Revenue increased 43% YOY to $316 million. Net loss came in at $12 million, or 5 cents loss per share. Cash and equivalents ended the quarter at $1.1 billion.
U stock trades around $115 per share, down 11% over the past year. Despite a decline of nearly 20% YTD, shares are not necessarily cheap at 26 times trailing sales. The 12-month median price forecast for Unity stock stands at $160.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.