What high-growth trend could put Netflix out of business, run over Uber and set eSports on a supercharged path? Blockchain, apparently.
The hottest trend since, well, bitcoin, is a bit of a mystery. On the face of it, blockchain is a decentralized digital ledger where cryptocurrency transactions are chronologically logged for the public good. But aside from ensuring against crypto fraud, blockchain is speculation, pure and simple.
Some believe that it could revolutionize media, do away with Hollywood’s centralized studio system, put money directly in ride-sharer’s pockets and lower the barrier of entry into eSports. And that’s just scratching the surface of blockchain’s appeal. It’s no wonder why a Long Island ice tea company can change its name to “Long Blockchain” and gain triple-digits overnight.
Whether you see blockchain as this revolutionary technology that will change the world, or you see it as a cool concept without a serious real-world application, plenty of companies are putting their best minds to work on figuring out how to best crack blockchain’s potential.
The five blue-chip stocks that follow not only have blockchain programs on tap, they’re also backed by the top analysts on Wall Street. Which means that if this whole blockchain thing doesn’t work out, then these companies won’t leave you high and dry … unless, of course, you bought into that whole Long Blockchain thing.
Blue-Chip Blockchain Stocks: Apple Inc. (NASDAQ:AAPL)
Apple Inc. is known for entering fields late and conquering them. While it’s still relatively early in the blockchain world, Tim Cook & Co. quietly filed a new patent application for certifying timestamps using blockchain.
This patent, filed with the U.S. Patent & Trademark Office, gives us a look into Apple’s potential use of the vaunted technology. And it’s not exactly what you might expect.
Apple’s blockchain patent involves the use of the “hash” that exists within a block to verify time stamps. These hashes will be included as nodes within subsequent blocks to determine their validity.
If a time stamp has been tampered with, its hash will no longer be consistent with the hash value before it. The inconsistent block, and all blocks after it, then will be invalidated to prevent tampering:
“If any party attempts to alter a node some time earlier in the blockchain, each hash puzzle solution for block subsequent to the altered block becomes broken or incorrect. Each participant can see that such a broken blockchain does not agree with their own copy of the blockchain. The broken blockchain is thus not recognized by the nodes.”
The data scandal Facebook is currently embroiled in is proof of Big Tech’s need to better secure the data it receives from its users.
According to TipRanks, Apple stock is rated on average as a “Moderate Buy” by 28 analysts, with a consensus price target of $191.76. Morgan Stanley analyst Kathryn Huberty, specifically, is one of the top-performing analysts covering AAPL, expecting near-20% upside in Apple stock to a price of $203.
Blue-Chip Blockchain Stocks: Akamai (NASDAQ:AKAM)
Akamai isn’t a household name like Apple, but it’s involvement in content delivery and cloud computing makes it naturally suited to blockchain experimentation.
Indeed, Akamai recently posted an ad on its company website for a principal architect to work on blockchain technologies. The position asks for candidates with experience in distributed systems design, leading engineering and development teams, and prior involvement in blockchain technology.
Akamai hasn’t devolved its blockchain plans, but it’s not hard to see what it may use the technology for. One of Akamai’s product categories is cloud security, or providing enterprise businesses with enterprise security and DDoS mitigation. In fact, a blockchain-powered competitor in this area has cropped up – Gladius.
Akamai’s application would likely take a page out of Gladius’ playbook, using the blockchain to better secure websites from DDoS attacks. This is done by decentralizing CDN and DDoS mitigation services through allowing users to “rent” out their spare bandwidth in exchange for tokens they can redeem for cash. The trick here is that, through decentralization, there’s no single point of failure.
Akamai is rated as a “Moderate Buy” based on 11 of the best-performing analysts, according to TipRanks. Since any tailwind from blockchain likely isn’t priced into AKAM stock, it looks plenty attractive on its own with 12.5% upside from here.
Blue-Chip Blockchain Stocks: VMware (NYSE:VMW)
VMware, Inc., a provider of virtualization and cloud infrastructure, is another tech player getting in on blockchain mania. Or perhaps “mania” isn’t the right word, as VMware’s quiet patent-filing suggests a relatively levelheaded approach:
“… leverage a blockchain network and one or more cloud storage services to enable large data transfers over a public network in a secure, scalable, and cost efficient manner.”
The patent refers to its technique as hybrid blockchain-based data transfer (HBDT). Its intended use in the corporate cloud positions VMware in a booming industry, as everything is done in the cloud these days. (Can you tell me the last time you backed up your data to a proprietary in-house database? Was Friends still on air?)
WMware’s HBDT would circumvent high costs associated with leasing or building within public network infrastructure, provide more security against hackers, realize a more data-efficient use of the blockchain, and improve performance and scalability of data throughput. Yeah, it’s a mouthful, but it’s a unique take on blockchain that works to VMware’s strengths.
Rated as a “Moderate Buy” by 18 top-performing analysts as collected by TipRanks, VMW stock sports near-17% upside from its current perch of $121.24.
Blue-Chip Blockchain Stocks: Amazon (NASDAQ:AMZN)
Amazon.com, Inc., as you know, isn’t just a simple books merchant born from the mind of a boy from Albuquerque. It’s now a contemporary mega conglomerate that banks on streaming video, music, cloud infrastructure and artificial intelligence ran by the richest man in the modern world. Why wouldn’t Amazon be involved in blockchain?
Sure enough, Amazon is looking to invest in blockchain partners in its own AWS partner ecosystem. Specifically, AMZN wants blockchain partners in healthcare and life sciences, financial services, supply chain management, security and compliance.
“AWS provides the broadest and deepest capabilities and the largest global infrastructure for building end-to-end blockchain platforms, cost efficiently and at scale. APN Technology and Consulting partners offer a rapidly growing selection of blockchain and distributed ledger solutions with support for multiple protocols.”
So far, a number of companies have signed up with Amazon to build a blockchain-based platform for AWS. T-Mobile (NASDAQ:TMUS) is building a “digital identity and authentication platform” called Sawtooth; PwC is using the blockchain to work with AWS Identity and Access Management to approve claims and make payments automatically; Pokitdok partnered with AWS to support its blockchain technology for improving the healthcare patient experience by making it more transparent and less costly.
Even with its investment into blockchain, Amazon would remain a “Strong Buy” as rated by the top-performing analysts rounded up by TipRanks. And despite its massive growth already, AMZN stock still sports double-digit upside from today’s price.
Blue-Chip Blockchain Stocks: Alibaba (NYSE:BABA)
Alibaba Group, sometimes known as “The Amazon of China” is doing more than just walking in the footprints left by the giant before it. In some cases, Alibaba is the giant. Just look at its cashier-less stores in China.
CEO Jack Ma may not be a fan of bitcoin (he famously said that it’s not for him), but his company is a fan of blockchain, and it’s more involved in the technology than even Amazon. Specifically, Alibaba’s e-commerce platform, T-Mall, has Partnered with Cainiao, a logistics company in China, to use blockchain on supply chain logistics to better track its imported and exported goods.
This would enable Chinese consumers to track as many as 30,000 products across 50 countries down to shipping port, arrival port, method of delivery and more using an app. The end goal is to bring back consumer confidence in a market overrun with counterfeits, including Alibaba’s own Taobao.
BABA stock is rated by 12 of the best-performing analysts according to TipRanks as a “Strong Buy“. If that doesn’t make your mouth water, then its 30.2% upside surely will.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of TipRanks.