There are some blockchain stocks that every investor should have on their radars. These companies are strong contenders in the blockchain space, and I think they are an alternative to investing directly in cryptocurrencies such as Bitcoin (BTC-USD).
One of the great things about these blockchain stocks for those who like to take risky positions is that they offer the potential for significant upside. The blockchain and cryptocurrency sectors have seen immense growth and volatility in recent years, creating opportunities for investors willing to take on the associated risks.
Furthermore, many of these stocks are more volatile than the crypto market itself, due to there being more risks involved in investing in blockchain stocks that cryptocurrencies. Investors need to deal with company-specific, idiosyncratic, and other risks that are not present with cryptos like Bitcoin.
The upside though is that these companies can surge to loftier heights, due to having a higher “Beta” relative to the crypto market. Furthermore, some of these companies carry “Strong buy” ratings from analysts, which furthers the bull case even more.
So here are three blockchain stocks for investors to consider.
Mastercard (MA)
Mastercard (NYSE:MA) has ventured into blockchain through partnerships with major blockchain providers to release Cryptocredentials, aiming to bolster security and trust in cryptocurrencies.
It’s also exploring the blockchain for solutions in other endeavors. For instance, its Provenance solution leverages blockchain for supply chain visibility, addressing needs in diverse sectors like luxury fashion and seafood
The company also has a “Strong buy” rating from analysts, and is currently fairly valued. However, due to the accretive EPS forecasts for MA stocks, I expect that analysts will revise their price targets upwards also.
MA stands out as one of those “blue-chip” blockchain stocks for investors to consider who also want exposure to the fintech industry while not being exclusively tethered to the wild movements of Bitcoin and the wider crypto market. It might be a good fit then for people who have less risk tolerance and are closer to the end of their retirement journey.
Riot Blockchain (RIOT)
Riot Blockchain (NASDAQ:RIOT) specializes in Bitcoin mining and has seen significant stock growth. RIOT is for a very different kind of investor than MA, as investing in companies like RIOT carry significant risks.
The truth is that blockchain stocks like RIOT depend on the continued speculation of Bitcoin increasing in price in order for them to stay in business. This risk then amplifies potential gains and losses, which pours octane on RIOT’s volatility.
Still, it’s doing everything it can to deliver strong returns for investors. In 2024, RIOT is focusing on expanding its Bitcoin mining capacity and efficiency. The company anticipates reaching a total self-mining hash rate capacity of 29 EH/s by the end of 2024, with plans to further increase to 38 EH/s upon full deployment of newly purchased miners in 2025.
Despite these efforts, the company’s share has decreased around 3% over the past year, and I think that this then creates a buying opportunity. It has a “Strong buy” rating from analysts, and also boasts a predicted upside of 65%, to be reached within the next twelve months.
Applied Digital Corporation (APLD)
Applied Digital Corporation (NASDAQ:APLD), formerly Applied Blockchain, operates data centers providing digital infrastructure. Of all the “Strong buy” blockchain stocks on this list, APLD has the most robust consensus, with four analysts rating it this way.
I think that APLD could be another one of those diversified companies for investors to pay attention to, especially if they are not so bullish on the Bitcoin mining industry in general, which is speculative. APLD instead supplies the “picks and shovels” to the mining industry, but has a diversified base of revenue.
The future also looks accretive for APLD stock investors, making it one to watch. In fiscal 2024, APLD anticipates total revenue to lie between $385 million and $405 million, with Adjusted EBITDA expected to range from $195 million to $205 million.
The fiscal Q2 2024 results revealed a 242% increase in total revenue to $42.2 million compared to the same quarter in the previous year, despite recording a net loss of $10.5 million, which however marked an improvement from a net loss of $26.8 million in the same period last year.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.