Let’s start with the smallest company on our list: Overstock.com Inc (NASDAQ:OSTK). Overstock.com Inc (NASDAQ:OSTK) is an online retailer that started accepting payments in Bitcoin back in 2014. In addition, the company has a subsidiary that is focused on developing blockchain technology and it has recently launched a joint venture for a global property registry. Overstock.com Inc (NASDAQ:OSTK) saw 16 funds in our database holding nearly 15% of its stock at the end of 2017, compared to nine funds a quarter earlier. At the end of 2016, there were 12 funds in our database long Overstock. One of the top shareholders of Overstock.com Inc (NASDAQ:OSTK) is billionaire George Soros‘ Soros Fund Management, which initiated a stake containing 2.47 million shares during the fourth quarter.
The cryptocurrency boom had a particular effect on semiconductor companies, which sell hardware that is used in cryptocurrency mining. While semiconductor companies have at first shrugged off the impact of mining on their sales, they have started to mention it in their earnings calls and even announced new products designed specifically to address the needs of the cryptocurrency industry. Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA), whose GPUs are used for mining altcoins (cryptocurrencies other than Bitcoin), have noticed a significant growth in quarterly revenue since the beginning of 2016. For example, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s quarterly revenue declined by double digits in year-on-year terms between the fourth quarter of 2015 and the first quarter of 2016, the following quarters saw robust double-digit growth. NVIDIA Corporation (NASDAQ:NVDA)’s revenue has been increasing by an average of 40% on the year in the last eight quarters.
Advanced Micro Devices, Inc. (NASDAQ:AMD) saw the number of funds long its stock decline by six to 30 during the fourth quarter of 2017. Similarly, during the fourth quarter of the previous year, the number of bullish investors among those we track also slid to 32 from 47. In the meantime, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s stock lost over 11% last year.
NVIDIA Corporation (NASDAQ:NVDA) saw similar trends. At the end of the fourth quarter, there were 48 funds in our database holding shares of the company, down by nine over the quarter. However, heading into 2017, there were just 35 funds long NVIDIA Corporation (NASDAQ:NVDA).
Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) is the largest semiconductor foundry in the world. Among its many clients is Bitmain, a company that manufactures ASICs, dedicated machines that are used by professionals for mining bitcoins. Bitmain is the largest seller of ASICs and during the third-quarter earnings call, the company said that it had generated between $350 million to $400 million in revenue from crypto miners, which equated to roughly 4%-5% of its total revenues for the quarter.
Among the funds in our database, Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) saw an increase in popularity during the fourth quarter, as the number of investors long the stock increased by five to 33.
Then there’s International Business Machines Corp. (NYSE:IBM), which might be the best bet on the cryptocurrency boom and not just because it is the most popular stock among the five we selected, with 56 funds long its stock heading into 2018. The reason why International Business Machines Corp. (NYSE:IBM) is a reliable play on the cryptocurrency industry is because it doesn’t have any exposure to cryptocurrencies. Instead, International Business Machines Corp. (NYSE:IBM) is shaping itself to be a leader in blockchain technology, which powers Bitcoin and other cryptocurrencies. Blockchain has a lot of advantages in the corporate world and is expected to be a major disruptor to many industries and International Business Machines Corp. (NYSE:IBM) is at the forefront, having teamed up with companies from the food industry like Nestle and Walmart Inc (NYSE:WMT), as well as banks, such as UBS Group AG (USA) (NYSE:UBS) and shipping giant Maersk, to develop blockchain-based applications for the respective industries.
Disclosure: none
