Bitcoin (BTC) and other cryptocurrencies have garnered significant attention on Wall Street in recent times. However, technology experts suggest that the underlying blockchain technologies hold greater potential impact on the world compared to the currencies themselves.
These experts envision blockchain as the foundation of Web3, a decentralized evolution of the internet transferring control from major tech companies to users. Within Web3, artificial intelligence and machine learning are expected to be pervasive, enhancing the internet’s utility and adaptability.
Nevertheless, Web3 is still a nascent concept, posing challenges for stocks solely focused on blockchain, the metaverse, and Web3 infrastructure. It remains more of a conceptual narrative than an operational network, introducing additional risks and uncertainties.
Some of the most successful stocks of the past two decades, like Meta Platforms Inc. (META), Amazon.com Inc. (AMZN), Alphabet Inc. (GOOG, GOOGL), and Netflix Inc. (NFLX), have played pivotal roles in shaping current web interactions. Identifying early-stage Web3 stocks could lead to substantial returns for investors.
Bank of America analysts recommend five Web3 stocks to consider:
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Nvidia Corp. (NVDA):
- Designs and sells high-end graphics and video processing chips.
- The Nvidia Omniverse platform facilitates 3D workflows and metaverse applications.
- Analyst Vivek Arya projects sustained annual revenue growth of at least 22% through 2026.
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Meta Platforms Inc. (META):
- Owns and operates major social media platforms, including Facebook and Instagram.
- Focusing on building a metaverse with blockchain and AI technology.
- Bank of America has a “buy” rating and $425 price target for META stock.
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Block Inc. (SQ):
- A financial services and digital payments company.
- Allows Bitcoin trading through Cash App and supports decentralized finance (DeFi).
- Bank of America recommends with a “buy” rating and $85 price target for SQ stock.
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Roblox Corp. (RBLX):
- An online entertainment platform and potential functioning metaverse.
- CEO David Baszucki embraces Web3 principles, foreseeing seamless integration of blockchain-based assets.
- Bank of America recommends with a “buy” rating and $54 price target for RBLX stock.
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Unity Software Inc. (U):
- Owns one of the main 3D video game engines.
- Added a decentralization category to support developers focusing on decentralization in gaming.
- Analyst Michael Funk foresees continued double-digit percentage annual revenue growth.
Investors are advised to exercise caution as the Web3 concept is still evolving, and stocks in this space may face uncertainties and challenges in the near term.