Regardless of their price volatility, cryptocurrencies always remain in the spotlight. However, the biggest developments are on the blockchain technology front and that’s where investors will find long term value creators. Shifting away from talking about cryptos, this column will focus on the best blockchain stocks to buy.
Let’s come back to the blockchain technology growth potential. In 2022, the blockchain technology market size was $4.8 billion. The market size is expected to swell to $674 billion by 2030 and further to $2.3 trillion by 2032.
An important point to note is that blockchain technology is applicable across industries. The advantages include cost reduction, improved efficiency, security and innovation, among others. It’s estimated that blockchain technology can add more than $2 trillion to the global GDP by 2030.
With all these optimistic estimates, it’s a good idea to consider exposure to blockchain stocks. Let’s discuss the reasons to be bullish on these names.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) stock has witnessed a massive rally with an upside of 218% in the last 12 months. It makes sense to wait for some correction before considering fresh exposure to the stock that’s surging on the back of the potential growth from the AI market.
Nvidia is not directly related to blockchain technology. However, the GPU industry is booming due to blockchain development and that benefits Nvidia. As an example, the Nvidia Cmp Hx is a dedicated GPU for professional mining. This also underscores the company’s commitment to grab a pie of the swelling crypto and blockchain industry.
The blockchain industry is still at a nascent growth stage. As the industry swells in size, it’s likely that Nvidia is likely to invest in blockchain products and solutions that deliver efficiency, cost reduction and privacy to various industries.
IBM (IBM)
IBM (NYSE:IBM) trades at an attractive forward price-to-earnings ratio of 17.5 and offers a dividend yield of 3.98%. With the company increasingly investing in blockchain solutions, I am bullish on the segment for the next five to ten years.
Currently, IBM is providing blockchain solutions for industries that include banking, financial services, healthcare and government. This would imply a big addressable market. IBM has already made inroads in terms of providing solutions to specific clients. This includes the likes of Home Depot (NYSE:HD) and Lygon.
Besides this, IBM is working on critical areas like supply chain and robust traceability solutions. When the markets talk about a $2.3 trillion market for blockchain by 2032, these are the areas that will witness growth. Therefore, in the next 10-years, I would not be surprised if blockchain technology contributes significant to IBM stock value creation.
Block (SQ)
Block (NYSE:SQ) is among the most undervalued blockchain stocks to buy. At a forward P/E ratio of 34, the growth stock looks attractive. I would expect at least 100% returns from current levels in the next 24 months.
Square was re-branded as Block in 2021 and this underscores the company’s commitment towards Bitcoin and blockchain technology. In June 2022, it was reported that will be building a new platform, Web5, on the Bitcoin blockchain. The objective of the platform would be to bring decentralized identity and data storage to applications.
It was also reported in July 2023 that Block is building a “sci-fi” crypto wallet to keep Bitcoin safe. The self-custody Bitcoin wallet was launched in December 2023. These are just some developments and with an early-mover advantage, Block is positioned to make inroads in the blockchain industry.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
