In this article, we discuss the 5 Web 3.0 stocks to buy and hold for the long term. If you want to read about more Web 3.0 stocks, go directly to 10 Web 3.0 Stocks to Buy and Hold for Long Term.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 69
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor firm. Major hedge funds are bullish on the stock. Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD) with 21 million shares worth more than $3 billion.
Blockchain technology requires cutting edge processing power. The chips that are made by Advanced Micro Devices, Inc. (NASDAQ:AMD) are some of the most powerful in the world and hence are one of the leading hardware items used for crypto mining. As reliance on blockchain increases, AMD is likely to benefit from a corresponding rise in demand for chips.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Advanced Micro Devices, Inc. (NASDAQ:AMD) was one of them. Here is what the fund said:
“We also exited our positions in Advanced Micro Devices, Inc. (NASDAQ:AMD). Our investment campaign in Advanced Micro Devices, Inc. (NASDAQ:AMD) began in the second half of 2018, and we have seen a new management team reinvigorate the company’s product portfolio of microprocessors for PCs and servers, graphics processors, and video game consoles. These new, higher-margin products have helped the company partially close its margin gap with peers and capture share from market leader Intel. While we believe there is a meaningful runway for further share gains and margin expansion, Advanced Micro Devices, Inc. (NASDAQ:AMD) has appreciated far beyond our mid-cap market cap mandate, and we exited our position.”
4. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 96
Block, Inc. (NYSE:SQ) provides payments solutions. Block has been one of the earliest cheerleaders of blockchain technology in the payments universe. This has allowed the company to position itself for the advent of Web 3.0 as it has already integrated blockchain tech into the Block platform.
Block, Inc. (NYSE:SQ) remains a top payments stock on Wall Street despite a broader lull around growth stocks. At the end of the fourth quarter of 2021, 96 hedge funds in the database of Insider Monkey held stakes worth $5.9 billion in Block, Inc. (NYSE:SQ), compared to 98 in the preceding quarter worth $8.8 billion.
In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“We established a position in leading Financial Technology provider Block, Inc. (NYSE:SQ) during the quarter. Through one integrated system, Block, Inc. (NYSE:SQ) is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that Block, Inc. (NYSE:SQ) has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.
We estimate that Block, Inc. (NYSE:SQ) can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of the company’s future value will be from its Cash App business.”
3. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 108
Sea Limited (NYSE:SE) is a diversified technology company. Elite hedge funds hold large stakes in the company. At the end of the fourth quarter of 2021, 108 hedge funds in the database of Insider Monkey held stakes worth $10 billion in Sea Limited (NYSE:SE), compared to 117 in the previous quarter worth $14 billion.
With interests in ecommerce, entertainment, and fintech, as well as heavy exposure to crypto, Sea Limited (NYSE:SE) is well positioned to gain from the mainstreaming of Web 3.0 as it invests in decentralization and blockchain.
In its Q4 2020 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Sea Limited (NYSE:SE) was one of them. Here is what the fund said:
“Sea Limited (NYSE:SE): When I wrote our Q4 2019 letter about Shopee launching a Brazilian business, it seemed very few investors or competitors knew or cared.
A year ago, I wrote: “This is the first test for the ecommerce marketplace outside of its Southeast Asia home base. Will the platform’s fun and addicting features overcome a lack of local knowledge and presence? It’s hard to predict consumer behavior and how accepting users will be to a platform – especially one that’s a foreign culture and 10,000 miles away. The only way to know is to experiment and watch the results closely.
Empirically though, it seems that what consumers find entertaining in Asia, generally translates well to Brazil (and Shopee really is as much an entertainment platform, as an ecommerce one).
For example, just look at the top 10 free apps in Brazil. Two are utility messaging apps, so we’ll ignore those (WhatsApp and
Facebook Messenger). But among the remaining eight apps, they’re all entertainment based and overwhelmingly Asian. Four are from China (Kwai, TikTok, VStatus, TikTok Lite), two from Singapore (Free Fire and Shopee, both Sea Ltd apps), and one from the US (Instagram). The commonality is that all these apps are experts at creating addictive habits, as evidenced by their personalized recommendations, avg usage time, number of logins per day per user, etc.” (LINK)
I distinctly remember having conversations with several Brazilian hedge funds as recently as last summer who were investors in Sea Limited (NYSE:SE). When the topic of Brazil came up, many of them didn’t even know Shopee was operating in their own backyard!
Part of this stems from the fact that Shopee..”[read the entire letter here]
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
Apple Inc. (NASDAQ:AAPL) is a California-based tech firm. The company recently banned data tracking, closely aligning itself with the privacy and security that is the hallmark of blockchain and Web 3.0. As one of the leading tech brands in the world, it has also been promoting the metaverse and cryptocurrencies, two important Web 3.0 domains.
Apple Inc. (NASDAQ:AAPL) is one of the most valued tech stocks in the finance world. Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in Apple Inc. (NASDAQ:AAPL) with 63 million shares worth more than $11.3 billion.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple Inc. (NASDAQ:AAPL) is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple Inc. (NASDAQ:AAPL) was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT) with 26 million shares worth more than $9 billion.
Microsoft Corporation (NASDAQ:MSFT) is one of the leading investors in artificial intelligence and emerging technologies. It has also recently stepped up investments in the blockchain world, signaling that it is preparing for a dive into the metaverse and Web 3.0.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft Corporation (NASDAQ:MSFT) in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and Microsoft Corporation (NASDAQ:MSFT) stock continues to reflect the fundamentals.”
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