Bitcoin surged in 2020, with its price climbing about 150% since the start of the year. After many months of volatile trading, the cryptocurrency has returned to the $ 18,000 per coin range – not far from the high of $ 19,738 per coin it reached at the end of 2017. With its price spike, bitcoin is generating tons of excitement again. , but there could be even better investment opportunities in the tech sector.
We asked three Motley Fool contributors to profile a tech stock that they believe will outperform bitcoin. Read on to see why they identified Impinj (NASDAQ: PI), Square (NYSE: SQ), Advanced micro-systems (NASDAQ: AMD) as investments with the potential to generate large returns.
Looking for huge returns? Trends are your friend
Keith noonan (Impinj): I haven’t invested in bitcoin because I don’t understand it. I have been researching other cryptocurrencies, but still don’t know why the prices should go up or down. I also find it hard to formulate why an open source coin built on blockchain technology has much better prospects than other coins, which seem to be multiplying with each passing day.
However, I understand that bitcoin has garnered support because the bulls see it exploiting a variety of powerful trends and serving potentially valuable functions. While I don’t understand bitcoin, I do know that finding technologies that can harness and help shape influential trends can be a very rewarding approach to investing. Impinj stands out as one of my favorite growth bets in this mold.
Impinj manufactures radio frequency identification (RFID) tags, readers and software. The company’s RFID tags can function as more advanced versions of the barcode system and be used to enable non-electronic items to store and transmit data. Gathering and analyzing valuable information will be at the heart of 21st century business success, and Impinj offers solutions to track more elements and processes.
The company has the potential to show dramatic growth as new use cases for RFID technologies emerge and the adoption of hardware, software and support services increases. There is speculation involved in Impinj’s trajectory, but the stock has the potential to be a huge winner for risk-tolerant investors.
The Bitcoin Enabler
Joe tenebruso (Square): First off, let me tell you, I wouldn’t recommend selling bitcoin right now. As a contributor to The Motley Fool’s Crypto Society service, I have been bullish on bitcoin for some time and believe it could easily reach new all-time highs. But rather than speaking poetically about the venerable cryptocurrency itself, I would like to draw investors’ attention to another way to profit from the growing popularity of bitcoin.
Square CEO Jack Dorsey is a fiery Bitcoin bull. He sees a future in which he will eventually become the Internet’s “native currency” – and he intends to help make that vision a reality. Under his leadership, Square began offering its users the ability to buy and sell bitcoin on its massively popular Cash app in 2017. The digital payment company’s bitcoin business has grown steadily since then – to totaled $ 1.63 billion in revenue in the third quarter alone, an 11-fold increase year over year.
Square has also invested directly in bitcoin. He bought over 4,700 bitcoins for an average price of around $ 10,600 in early October. With bitcoin trading close to $ 18,000 today, that $ 50 million investment is now worth around $ 85 million. That’s a 70% gain in just over a month.
Still, importantly, Square sees bitcoin as more than just a get-rich-quick scheme. “Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system,” the company said in its bitcoin purchase announcement. Square believes bitcoin aligns well with its goals and values, and Dorsey is positioning the fintech star – and its shareholders – to profit generously from the crypto revolution.
Put your chips on that semiconductor stock
Will healy (Advanced micro-systems): In 2017, at the height of the last bitcoin bull market, AMD produced the favorite chips of cryptocurrency miners. However, today’s investors may want to take a look at the mining earnings of AMD stock itself.
Since Lisa Su took over as CEO in 2014, she has taken the young chipmaker from near bankruptcy to an industry leader. He challenged NVIDIA in the GPU market. Because of its success, some even call AMD the new “king of gaming processors”. AMD now powers the latest generation of SonyPlayStation and MicrosoftXbox game consoles, among other successes.
However, arguably his most impressive feat is turning the tide on his longtime rival. Intel. After decades of Intel lagging behind, AMD is now selling a 7nm chip while Intel has found itself unable to progress beyond 10nm processors.
For now, Intel remains the biggest producer. Yet AMD has gained ground.
In the last quarter, Intel produced about 6.5 times more revenue than AMD. In the quarter of last year, Intel’s revenue was almost 11 times higher. The fact that AMD’s revenue grew 56% was a significant help, as was the 128% increase in adjusted earnings per share.
In addition, even though analysts expect growth to slow down somewhat next year, they still forecast a 50% increase in net income. With a forecast P / E ratio of 48, that makes the AMD stock a good deal despite its 70% share price growth in 2020.