The Blockchain Boom Is Still Happening Behind the Scenes. These 3 Growth Stocks Will Benefit.
Key Points
Block has been an early pioneer of blockchain technology and is projecting meaningful operating income growth next year.
IBM's blockchain platform is already used by several companies and has successful case studies.
Amazon's cloud platform powers many public blockchains, and as the industry expands, AWS will end up with higher monthly recurring revenue.
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Blockchain technology is one of the most innovative technologies that can compound wealth for savvy investors, but blockchain won't feel as mainstream as Bitcoin.
One of the main takeaways from the Assets on Blockchain Conference is that the next 1 billion blockchain users won't be onboarded into blockchain. Instead, they will be onboarded to blockchain-based products. For instance, people do not need to know how Apple Pay's technology works to use the service.
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Speakers at the event highlighted how blockchain can make the financial grid more efficient and bring greater transparency to alternative assets such as real estate. You don't have to create blockchain technology to ride this trend. These three growth stocks are well-positioned to reward investors seeking greater exposure to blockchain.
Image source: Getty Images.
1. Block
Block (NYSE: XYZ), formerly known as Square, has been at the forefront of blockchain technology for many years. It was a pioneer in enabling crypto transactions for everyday products and services. The company's Cash App makes it easier for people to spend, save, and invest, and it uses blockchain technology for some of its services.
Blockchain technology helps Block support cryptocurrencies and stablecoins on its app. The fintech company has been expanding beyond Bitcoin to give its users more flexibility.
Block also continues to gain market share in its small-business services, which helps explain the company's aim for a 69% year-over-year boost in adjusted operating income in fiscal 2027.
2. IBM
IBM (NYSE: IBM) reinvented itself in recent years. Cloud computing and enterprise AI solutions have put the dividend stock back on the map. Its shares more than doubled over the past year despite a sluggish year-to-date performance.
Its software, consulting, and infrastructure segments all trended upward in the third quarter, resulting in 5% year-over-year overall revenue growth. IBM CEO Arvind Krishna noted in the press release that the company's artificial intelligence was driving transformations across multiple businesses.
On the blockchain side, IBM Blockchain Platform is an enterprise-grade blockchain-as-a-service software that helps financial institutions, logistics companies, retailers, and other corporations track the movements of products and services more accurately.
For instance, IBM's blockchain has reduced food waste and can pinpoint bad batches during an E. coli outbreak. That way, healthy food doesn't have to be thrown out.
It shows that blockchain already improves people's lives without it being a front-and-center part of market news like AI stocks.
3. Amazon
Although Amazon (NASDAQ: AMZN) rolled back its Amazon Managed Blockchain service, its cloud platform remains the backbone of most blockchain platforms. Amazon Web Services offers the compute, storage, and developer tools that companies need to create and maintain public blockchains.
Amazon's cloud segment has been reaccelerating over multiple quarters, and it does not look like growth is slowing. AWS sales jumped by 39% year over year, propelling overall revenue up by 12% year over year. It was the highest growth rate for AWS in nearly five years, and the cloud platform now generates $184 billion in annualized revenue.
Amazon's cloud platform also has higher margins than its e-commerce business, translating into meaningful profit expansion. Companies that use Amazon Web Services must continue to pay monthly fees and upgrade their plans as their storage and compute needs evolve.
Grandview Research projects a substantial 88.2% CAGR for blockchain technology through 2033. That build-out will require large investments in cloud computing, and Amazon is one of the biggest winners of that trade.
AWS is part of a broader business model that includes opportunities such as AI agents, online advertising, robotics, AI chips, and other segments. The tech stock has rewarded investors with a 17% year-to-date return.
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Marc Guberti has positions in Apple. The Motley Fool has positions in and recommends Amazon, Apple, Bitcoin, Block, and International Business Machines. The Motley Fool has a disclosure policy.
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