The fourth industrial revolution has finally arrived and the future belongs to a new set of key technologies. Steve Chiavarone, portfolio manager for Federated Investors, told CNBC that blockchain tech could set off a global revolution in information management, supply chain, administration and virtually every major industry.
Money poured into Bitcoin first, explains Chiavarone, as a result of investors looking for exposure to blockchain-which could bring more efficient supply chains and cut costs.
Mentioned in today’s commentary includes: Bank of America Corp. (NYSE: BAC), International Business Machines Corp. (NYSE: IBM), Cisco Systems, Inc. (NASDAQ: CSCO), Veeva Systems Inc. (NYSE: VEEV), Sony Corp (NYSE: SNE).
Along with AI, automation, robotics and the Internet of Things, key tech like blockchain may likely completely transform the global economy and the future is bright for companies that seize the initiative and pursue these game-changing trends.
Here are several firms that span the tech and finance spheres. Each one deserves special attention from investors. Take a look:
One of the best stocks of 2017 has continued its winning streak into the New Year. NVIDIA, the world’s leading computer hardware manufacturer, announced Q1 earnings that included a 66 percent jump in revenue and the company has seen its profits and shareholder value surge thanks to rising demand for data centers, accelerated computing components and graphics processing units (GPUS), an NVIDIA staple.
CEO Colette Kress expects data center revenue to skyrocket, from $701 million this quarter to $50 billion by 2023, an increase of 17,000 percent and to process this enormous increase in data management, NVIDIA is investing in deep learning training-developing forms of artificial intelligence (AI) that allow computers to learn by observing human behavior.
The AI work comes on top of NVIDIA’s Titan X GPUs, and while it’s only in the experimental phase, analysts are already predicting NVIDIA will emerge as the premier AI firm once the tech has been fine-tuned. That means the best stock of 2017 could be a winner for years to come.
Global Blockchain Technologies (BLOC; BLKCF)
Breaking Update: Hewlett Packard announces partnership with Global Blockchain Technologies to transform the data storage market. This groundbreaking agreement will allow users to profit from excess digital storage space, expanding on the success of companies such as AirBnb and Uber in utilizing the sharing economy.
Blockchain technology could transform entire industries. Put simply, it’s a digital ledger used to store transactions. It has been used primarily with crypto-currencies like Bitcoin and Ethereum. But its potential applications are far wider.
Already, blockchain is being used to transform real estate, finance, healthcare and retail, to name just a few.
Global Blockchain Technologies can be thought of as two companies in one: a crypto-currency hedge fund-type entity that enables shareholders to participate in the cryptocurrency market, and also an incubator for blockchain tech.
BLOC’s management is staffed with experienced pros and veterans of the crypto-currency marketplace. This is no “Millennial Millionaire” start-up looking to make a quick buck mining Bitcoin, but a seasoned, qualified blockchain and crypto firm that can secure the best investment opportunities.
BLOC holds a diversified portfolio of crypto-currencies, from the massive Bitcoin ($142 billion) to smaller cryptos with the potential for large jumps in value. According to President ShidanGouran, “When you invest in us, you’re investing in a company run by people who have been in blockchain from the beginning.”
Leading BLOC’s staff of experts is its Chairman, Steven Nerayoff. Nerayoff took part in the creation of Ethereum and helped engineering the currency’s meteoric rise…one that saw the humble crypto increase by 94,000 percent to a market cap of $70 billion.
BLOC leverages its deep bench of experts in finding applications for blockchain technology. Last year it entered into an arrangement which gives it partly ownership of KodakCoin, the world’s first corporate branded crypto currency, teaming up with Overstock.com and tZero to facilitate the KodakCoin initial coin offering (ICO).
BLOC is hoping to branch out into video games, an industry that already utilizes crypto-currencies for in-game transactions-the currency used in World of Warcraft, for instance, is worth more than the Venezuelan bolivar. BLOC is helping to create a “game galaxy” where crypto-currencies are used exclusively, and all transactions are processed on the blockchain.
Finally, the company’s premier blockchain asset is its new Laser platform, a tool that connects different blockchain networks into a single union-“blockchain without borders.”
BLOC can do all this with a tiny market cap, accessing potentially billion-dollar opportunities for its shareholders without exposing them to the risks inherent with individual investments in the Bitcoin world.
One of Silicon Valley’s trailblazers, PayPal hasn’t lost any momentum in 2018. The company added 8.1 million new active users in Q1, a jump of 35 percent from last year. Revenue growth is strong and net income reached $511 million, an increase of 29 percent.
But PayPal, which emerged as alternative to traditional financial firms, has since branched out-and it’s relying on its bill-splitting app Venmo to carry it into the next age of digital, peer-to-peer transactions.
Two million merchants around the U.S. now use Venmo, while the app’s total transaction base was $12.3 billion.
PayPal has been adding to its assets through acquisitions, taking over Swedish fintech firm iZettle for $2.2 billion before that company had a chance to carry out its IPO. Smart money is on PayPal following up this big buy with even more acquisitions, which would evidence an aggressive 2018 strategy.
Given how strong this stock has performed already, it’s clear the rest of 2018 looks bright for PayPal, particularly if its fintech investments pay off.
Bank of America (NYSE: BAC)
One of the biggest banks in the world is embracing “fintech”-financial technologies that could radically change how people, money and data interact. A few years ago, fintech firms started popping up all over the place. They seemed leaner and meaner than the established banks-but now venerable firms like BAC have gone back on the offensive, buying out their fintech competition and developing their own innovative tech to stay in business.
BAC has acquired a taste for blockchain patents, and currently holds more than any other financial firm.
One of those patents is for a blockchain-based system for managing network security-one that would be fully automated.
BAC boasted at Davos this year that it’s spent more money on blockchain tech than any other bank, though some analysts believe it’s falling behind in the fintech race. COO Cathy Bessant told CNBC that AI will be the key to fintech’s future-and feels BAC is at the forefront of bringing AI to average consumers.
On the basis of these innovations, BAC has been a strong performer, rising by 150 percent in the last five years. It’s long been an earner for shareholders, and with its investments in blockchain, BAC will likely continue to bring value to its shareholders. Its price might seem a little high, but for investors looking to profit from the fintech revolution, you could do a lot worse.
IBM (NYSE: IBM)
Another venerable tech firm with a long pedigree has bought into tomorrow’s technologies. International Business Machines (IBM) has been an aggressive advocate of applying the newest tech to solving a wide range of problems. When it’s not taking on new acquisitions, IBM is investing heavily in blockchain.
This year could be the year that IBM, along with other major firms, brings blockchain to mainstream business.
IBM has praised the blockchain for its security and transparency, and about sixteen months ago it launched a blockchain business. Right now, about 1,500 employees of the firm are working on blockchain projects.
One project has food and retail giant Walmart using IBM’s blockchain tech to track the food supply chain. IBM has launched an initiative extending blockchain solutions to small-time food distributors in Kenya.
IBM is also working with Maersk, the shipping giant, on using blockchain for logistics. With the resources to tackle major problems, IBM could emerge as the torchbearer that brings blockchain into the mainstream-allowing its shareholders to reap the benefits.
So, while the stock might be a bit overpriced and has suffered through some doldrums since early 2018, we believe IBM will improve as its tech imprint grows.
Other companies to watch as the tech industry continues to reshape the world:
Cisco Systems (NASDAQ: CSCO) is a major player in telecommunications hardware. With a market cap of more than $185 billion, the company earned $49 billion in 2015 and $48 billion in 2016. For years Cisco was a stable stock, though one that showed very little growth. But in 2018 the company plans on pivoting away from its old staples towards new products.
Cisco is about to make the transition from hardware to software. For years, Cisco sold the hardware needed to build and maintain telecommunications networks: internet routers, switchers and cables connecting thousands of offices and households.
Veeva (NYSE: VEEV) Veeva is one of the most prominent cloud services providers out there, focusing specifically on the pharmaceutical sector. The company’s cloud platform for the world’s pharma companies is more popular than ever before.
The cloud race is clearly heating up, with more and more getting into the SaaS business, but as a pioneer in a niche industry, Veeva can expect more repeat business and more solid growth than its competitors.
Sony Corp (ADR) (NYSE: SNE) is a tech heavyweight. From TVs to video games, Sony covers anything and everything media-related. The company’s infamous Walkman was in the hands of every young person throughout the 1980s and 1990s.
Sony’s partnerships and innovative technology make it an appealing investment for those looking for a company with longevity. Sony isn’t going anywhere and is sure to continue its entertainment dominance for years to come.
By. Charles Kennedy
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