Back to top

Image: Bigstock

3 Stocks With NFT Exposure That Could Make You Rich in 2022

Read MoreHide Full Article

Non-fungible tokens (NFTs) or digital collectibles are having a terrific 2021, with the industry achieving a record sales volume of more than $12 billion.

The sheer sales volume reflects NFTs’ success in attracting huge investments from entrepreneurs, celebrities and crypto enthusiasts. Momentum in crypto prices like bitcoin has been a tailwind for NFTs.

The popularity of NFTs exploded this year, thanks to marketplaces like the OpenSea, Rarible and The U.S. National Basketball Association Top Shot that allow fans to buy and trade NFTs.

Popularity of NFT’s has helped marketplaces raise capital from venture funds. For instance, OpenSea raised $100 million in a Series B round led by Andreesen Horowitz. The marketplace is now valued at $1.5 billion.

But before delving deep into NFTs’ worth as an investment vehicle, let’s find what a NFT is.

As the term suggests, NFTs are irreplaceable digital items. These can be images, artwork, collectibles, video snippets, music albums, in-game items, and many other items. NFTs are minted on a blockchain, similar to cryptocurrencies. Hence they are unique and scarce and hard to falsify.

Although NFTs don’t offer any royalty, interest or dividend on the digital item traded, bought and sold, NFTs give the investor a chance to benefit from crypto price momentum, as they are denominated in cryptocurrencies.

The popularity of NFTs is driven by a collector’s enthusiasm in gathering the authentic and authorized version of a collectible. However, speculative nature, lack of cash flow and higher liquidity risk are headwinds for NFT investors.
 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Hence, NFTs are not for the weak-hearted or investors looking for regular income. Instead, stocks with exposure to NFTs can offer better returns. Here we discuss three such stocks.

Funko (FNKO - Free Report) – This maker of pop-culture collectibles has been a frontrunner in expanding its footprint in the NFT space.

Funko acquired a majority stake in TokenWave, developer of TokenHead, a mobile app and website for showcasing and tracking NFT holdings, in April this year. Funko launched its NFT offerings on the WAX platform, the leading decentralized wallet on the blockchain, which provides verifiable authenticity for purchases of Funko NFTs.

Funko currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Mattel (MAT - Free Report) – This toy-maker giant has launched NFTs featuring one of the hottest brands – Hot Wheels. In June, Mattel launched Hot Wheels NFT Garage series that featured three vehicles from “The First Editions” vehicle collection.

Mattel’s popular product portfolio that includes iconic toys like Barbie, American Girl and UNO presents significant growth opportunities in the NFT space.

This Zacks Rank #3 (Hold) stock recently announced a collaboration for the NFT community and cryptocurrency holders from Mattel Creations and VeeFriends with a reimagined UNO deck featuring Gary Vaynerchuk’s VeeFriends NFT signature characters. The new deck offers UNO fans and NFT collectors the opportunity to own a VeeFriends collectible in the physical form of a UNO deck.

Cloudflare (NET - Free Report) – Another Zacks Rank #3 stock, this fast-growing cloud computing focuses on providing security solutions and a plethora of business solution tools, including packages for content delivery, software development kits, website development and analytics tools.

In April, Cloudflare announced that its Cloudflare Stream, the company’s video streaming service, is supporting NFTs. This means that creators and developers can embed NFTs in their videos, which affirms ownership rights and reduces the chances of piracy.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Mattel, Inc. (MAT) - free report >>

Funko, Inc. (FNKO) - free report >>

Cloudflare, Inc. (NET) - free report >>

Published in