With Bitcoin (BTC-USD) prices gaining again, growth-focused investors may wish to turn their attention to the blockchain stocks, many of which may be trading at enticing valuations now that blockchain technology’s applications outside of cryptocurrencies are starting to lose a bit of luster. Indeed, blockchain has plenty of potential beyond Bitcoin and the like. Perhaps some of the applications will exceed the hype brought on by Non-Fungible Tokens (NFTs) just a few years ago.
Indeed, it’s probably still the early innings when it comes to blockchain technology. As the top innovators look to incorporate tech as a part of their businesses, perhaps there are some economic benefits to be had. For now, though, it’s generative AI that has been the main technology firms are looking for to reduce costs, drive sales, and build value. And while generative AI is unquestionably the timelier technology to bet on, I also wouldn’t count blockchain innovators out of the game here.
Block (SQ)
Block (NYSE:SQ) is one of my favorite ways to play the long-term future of blockchain technology. The company isn’t just a big believer and investor of Bitcoin, but it’s also helping advance the field of blockchain technology. If CEO (or “Block Head”) Jack Dorsey wasn’t serious about the potential of the blockchain, he probably wouldn’t have renamed his firm from Square to Block.
Perhaps one of the most intriguing projects Block has been working on through its subsidiary TBD is Web5, a vision of a decentralized version of the Internet that builds on the Web3 concept. Indeed, it’s difficult to fathom the next generation of the web, whether it be Web3 or Web5.
Regardless, Dorsey seems to be cooking up something special with a blockchain-leveraging web that may have a greater emphasis on protecting one’s digital identity. Web5 represents an intriguing vision of the future, but there’s just one problem for prospective investors: it’s unclear when and if the effort will make a reasonable return on investment.
PayPal (PYPL)
PayPal (NASDAQ:PYPL) is another company that’s been exploring the possibilities of advancing the field of digital payments. It’s one of the pioneers in the earlier days of the internet, and now that there’s more competition, PayPal seeks to tap into innovation to regain a leg up.
With its own stablecoin and skin in the game of cryptocurrency investing, PayPal has plenty of skin in the crypto game. Looking ahead, PayPal may seek to increase its exposure to other fields within crypto and blockchain. Perhaps PayPal may have the solution to lowering the carbon footprint produced by crypto miners.
Last month, PayPal announced it will join forces with Energy Web and DMG Blockchain Solutions to incentivize Bitcoin miners, many of whom are power hogs, to operate in a more eco-friendly manner. I’m a huge fan of the effort, as PayPal looks to do its part to make Bitcoin mining greener.
IBM (IBM)
IBM (NYSE:IBM) stock has been gaining of late, thanks in part to its exposure to the AI race with Watson. Apart from AI and Watson, IBM is also involved in emerging corners of tech, including quantum computing and blockchain technology.
After pulling back 15% from its March 2024 high of nearly $198 per share, IBM stock looks like a dirt-cheap way to ride on the back of some pretty impressive emerging technologies. While it has taken a while for IBM to jolt growth, I do think it’s put the right cards in place to sustain the gains enjoyed last year.
The IBM Blockchain Platform is a cloud-based Blockchain-as-a-Service (BaaS) offering that aims to help enterprise customers unlock value to be had from the intriguing technology. As the platform advances, there may be more than AI prospects to love about the company. At 19.16 times trailing price-to-earnings, IBM stock looks like a solid value option for income lovers (3.95% yield at writing) and growth seekers alike.
On the date of publication, Joey Frenette 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.
