In this article, we will take a look at the 5 crypto stocks with biggest upside. To see more such companies, go directly to 11 Crypto Stocks with Biggest Upside.
5. CME Group Inc. (NASDAQ:CME)
Number of Hedge Fund Holders: 55
Financial derivatives exchange company CME Group Inc. (NASDAQ:CME) is one of the crypto stocks with upside potential according to financial media.
Insider Monkey’s database of 910 hedge funds shows that 55 hedge funds had stakes in CME Group Inc. (NASDAQ:CME). The most significant stakeholder of the firm was Guardian Capital’s GuardCap Asset Management which owns a $785 million stake.
Ariel Global Fund made the following comment about CME Group Inc. (NASDAQ:CME) in its Q2 2023 investor letter:
“We purchased shares of leading derivatives exchange, CME Group Inc. (NASDAQ:CME). The company has various competitive advantages, including its breadth of products across all asset classes, extensive client networks, and centralized clearing services. In our view, CME Group is well-positioned to benefit from favorable macroeconomics tailwinds including tapering, rate hikes, and inflation, which we believe will fuel volume expansion and generate value for shareholders.”
4. Interactive Brokers Group, Inc. (NASDAQ:IBKR)
Number of Hedge Fund Holders: 58
Baron Focused Growth Fund made the following comment about Interactive Brokers Group, Inc. (NASDAQ:IBKR) in its Q2 2023 investor letter:
“We also added to our investment in Interactive Brokers Group, Inc. (NASDAQ:IBKR), a leading securities brokerage company that provides securities brokerage to both retail and professional investors. Interactive Brokers differentiates itself through its low prices, the vast array of markets it serves, and its strong growth from countries where low-cost brokerage is not well penetrated. 80% of Interactive Brokers customers are from outside the U.S., while 80% of their assets are invested in the U.S. The company offers its clients low-cost trading due to its high level of automation. This while providing competitive margin loans and securities lending rates and offering attractive yields on uninvested cash balances. The company continues to hire software and computer engineers with a focus on automating many of the processes that competitors rely on employees to perform.
With its low-priced offering and leading range of capabilities, we believe that Interactive Brokers is well positioned to not just continue its rapid pace of account growth from just over 2 million clients today but to accelerate growth. The company’s focus on automation should enable it to continue being the low-cost provider, while earning best-in-class margins, which we believe should lead to double-digit revenue and earnings growth over the long run.”
3. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 66
Block, Inc. (NYSE:SQ) ranks 3rd in our list of the crypto stocks with upside potential. Block, Inc. (NYSE:SQ) is down about 16% year to date through September 11. During the second quarter, Block, Inc. (NYSE:SQ)’s adjusted EPS came in at $0.39, beating estimates by $0.02. Revenue in the period jumped 25.4% year over year to $5.53 billion, beating estimates by $430 million.
As of the end of the second quarter of 2023, 66 hedge funds in Insider Monkey’s database had stakes in Block, Inc. (NYSE:SQ). The biggest hedge fund stakeholder of Block, Inc. (NYSE:SQ) is Catherine D. Wood’s ARK Investment Management which owns a $714 million stake in the company.
2. Paypal Holdings Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 86
Paypal Holdings Inc. (NASDAQ:PYPL) recently surprised everyone by announcing a stablecoin called PayPal USD (PY-USD). Bank of America said in a report that Paypal Holdings Inc. (NASDAQ:PYPL)’s step might become a “payments catalyst” over time but the adoption of the cryptocurrency asset “is unlikely to be significant in the near term.” However Paypal Holdings Inc. (NASDAQ:PYPL) has several other growth catalysts as the company’s primary business remains poised to grow in the long term.
BMO’s analyst Brian Belski recently said in a note that he expects the S&P 500 to end the year on a higher note since many of their bull case assumptions “have become more credible lately.”
The analyst recommends some growth stocks that he believes have low market valuation (NTM P/E and PEG) and above market earnings growth expectations. Paypal Holdings Inc. (NASDAQ:PYPL) was one of the Belski’s top picks.
RiverPark Large Growth Fund made the following comment about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q2 2023 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL): PayPal shares were a top detractor in the quarter despite reporting better than anticipated 1Q earnings and raising guidance for the remainder of 2023. Revenue of $7 billion grew 9% year over year, an acceleration from the prior year and quarter. EPS of 1.17 grew 33% year over year on better cost discipline leading to better operating margins. The disappointment was centered around weaker gross margins, as unbranded checkout, which has lower gross margins, accelerated faster than branded checkout. Management anticipates this trend to continue and therefore guided to lower gross margins for the remainder of the year. Despite the gross margin headwind, operating margins continue to expand due to expense discipline.
PayPal is the most accepted digital wallet – with almost triple the acceptance of Apple Pay, the number two digital wallet – providing the purest exposure to the secular growth in ecommerce-driven digital payments. PayPal is also a key beneficiary of consumer-to-consumer payment trends through its Venmo peer-to-peer (P2P) payment service. With a 1Q non-GAAP operating margin of 23%, PYPL also has significant margin expansion potential given that competitors Adyen, Visa and Mastercard have 50%-65% operating margins. We believe the combination of the secular growth of eCommerce and P2P payments, along with expanding operating leverage and the strategic use of the company’s significant and growing cash balance should fuel at least a high teens earnings growth rate over the next five years. This, to us, presents an excellent risk/reward given that PYPL trades at a below market multiple.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 175
Even though NVIDIA Corporation (NASDAQ:NVDA)’s biggest growth catalyst now is generative AI applications as the company has an upper hand when it comes to making chips to power AI software, crypto mining remains an important catalyst for the stock. Whenever there’s a boom in crypto mining, NVIDIA Corporation (NASDAQ:NVDA) will see a jump in chips sales as the company’s systems are widely used for crypto mining all over the world.
As of the end of the second quarter of 2023, 175 hedge funds out of the 910 hedge funds tracked by Insider Monkey reported having stakes in NVIDIA Corporation (NASDAQ:NVDA). The biggest stakeholder of NVIDIA Corporation (NASDAQ:NVDA) was Rajiv Jain’s GQG Partners which owns a $5.9 billion stake in the company.
RiverPark Large Growth Fund made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2023 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA): NVDA shares were our next top contributor in reaction to blowout 1Q results and 2Q guidance. The company reported revenue of $7.2 billion and EPS of $1.09, 10% and 18% ahead of expectations. Revenue guidance for 2Q of $11 billion was 53% above expectations. The artificial intelligence arms race kicked-off by generative AI applications ChatGPT and Alphabet’s Bard has generated tremendous demand for Nvidia’s next generation graphic processors.
NVDA is the leading designer of graphics processing units (GPU’s) required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. Following 1Q’s strong results, Jensen Huang, founder and CEO of NVIDIA stated in the company’s press release, “[a] trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.”
You can also take a peek at Wall Street Analysts See Upside Potential for 10 Stocks with Rising Price Targets and 16 Most Profitable Dividend Stocks.
