Web3 is the decentralization of the Internet, allowing users to retain control over their data. Though Web3 is still in its early stages, its potential to drive forward the next wave of Internet evolution is hard to deny.
If you are an investor and want to benefit from this internet evolution, there is no better way than investing in Web3 stocks. In this article, we detail some of the best web3 stocks to buy today, taking into account recent performance in combination with future prospects.
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Best Web3 companies to invest in now
Web3 is in its infancy at this point, but technology moves fast. So, despite short-term concerns with the technology, we believe the following Web3 stocks are well positioned to benefit from this internet revolution:
1. Block Inc.: A pioneer in decentralized, peer-to-peer payments and decentralized finance (DeFi), Block is confident in its business model of providing users with a seamless and affordable payment solution. The company is refocusing its efforts to focus on its core competencies, including Bitcoin mining activities.
2. Unity Software: This company leads the way in supporting developers with solutions to facilitate decentralized gaming. The expansion of the Web3 gaming market would give Unity Software an avenue to boost its revenues significantly.
3. NVIDIA: The stock has already risen more than 2,500% in five years and is expected to move further up as Web3 gains popularity. Every Web3 application will require processing power, and a chunk of it will come from NVIDIA chips.
4. Coinbase: Web3 is very likely to create a use case for cryptocurrency, and this could push the stock of this popular crypto exchange even higher.
5. Meta Platforms: With a user base of more than 3 billion, this social media giant is working relentlessly to leverage its AI and AR capabilities to lead the web3 revolution.
6. Amazon: Like other tech giants, Amazon is also investing billions of dollars in AI technology to boost its capabilities and provide computing power for the next generation of applications.
7. Roblox: This online gaming company is focused on developing the world’s largest social space for play. Roblox expanded to the PlayStation platform just last year in a bid to gain more users.
8. Applied Digital: This company provides digital infrastructure solutions and cloud services to develop and operate data centers. Applied Digital aims to become a leading platform for building and operating multiple HPC data centers.
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An in-depth look at these top Web3 stocks
Now that you know what the top Web3 stocks are, let’s understand what makes them so.
1. Block Inc (SQ): Average annualized return of 22%
Block (NYSE:SQ) is a digital payments company and also the parent company of the Square payments platform. The firm is a pioneer in decentralized, peer-to-peer payments and decentralized finance (DeFi).
Block allows Bitcoin trading through its Cash App platform, while its Spiral subsidiary develops and funds free, open-source projects with the objective of making Bitcoin the world’s leading currency.
As part of a refocused strategy, the company will be closing some of its projects, such as its decentralized finance (DeFi) division, to focus on its core competencies, such as growing its Bitcoin mining activities and Bitkey, its self-custody wallet.
Additionally, the company is introducing new projects, such as Square’s Orders Platform, to boost its transaction volume and profitability.
Block’s shares are up over 40% in the past year one year, suggesting growing investor confidence in the company’s business model. Analysts are also positive on the stock, and believe Block’s refocused strategy will help it to maintain its dominance in Web3 field.
Block recently reported solid Q3 results with earnings beating the estimates. A significant portion of Block’s revenue comes from Bitcoin-related Cash App transactions.
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2. Unity Software (U): Average annualized return of -26%
Unity Software (NYSE:U) owns one of the two main 3D video game engines, which allows customization of games on the internet. If Web3 succeeds, Web3 gaming will take off as well, and this makes Unity a potential long-term bet.
Unity underlies most mobile games nowadays and offers its services to several markets, including console makers and Hollywood studios. Thus, the company is not just popular among game developers, but digital artists love it too for its mild learning curve and high-quality graphics.
To further boost its chances, the company introduced a new decentralization category page in its Unity Asset Store last year to support developers focused on enabling decentralization in gaming. The company also added several functionalities to its ecosystem, with the objective of combining blockchain, NFTs, and cryptocurrencies.
Though Unity is still not profitable and its stock down is significantly, it has been able to narrow its losses while significantly increasing revenues. Moreover, the Web3 revolution will open up new monetization opportunities for the company, such as from smart contracts and NFT sales.
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3. NVIDIA (NVDA): Average annualized return of 27%
NVIDIA (NASDAQ:NVDA) is an obvious choice when talking about the best Web3 stocks. No matter what form Web3 takes, every application will require NVIDIA chips.
NVIDIA’s GPUs (graphics processing units) are among the best when it comes to gaming and artificial intelligence applications, both being important components of the web3 world.
As a result, the expected demand for NVIDIA’s GPUs would be a multi-year phenomenon, and this bodes well for investors looking to stay invested in the chipmaker’s stock long term.
Many investors might feel that NVIDIA’s stock gain of over 2,500% in five years and over 200% gain this year could mean they are late to the party. However, considering the company’s Web3 growth potential and 250% increase in sales last year, the stock is still among the best bets for investors.
Many analysts, in fact, expect the company to maintain an annual revenue growth rate of double digits through at least 2026. Earnings are expected to normalize following the strong earnings growth of the last year, but NVIDIA likes to surprise Wall Street, so the stock could increase even further.
However, NVIDIA likes to surprise Wall Street, and if that happens, the stocks could increase further.
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4. Coinbase (COIN): Average annualized return of -3.5%
Coinbase (NASDAQ:COIN) is one of the biggest crypto exchanges globally. Since blockchain technology and cryptocurrency will be an important part of Web3, popular crypto stocks like this will also be in demand among Web3 investors.
Investing in Coinbase is like investing in a growing crypto market rather than an individual stock. This is because Coinbase is a cryptocurrency exchange, and its performance depends on the demand for other cryptocurrencies.
Moreover, the recent US presidential election is likely to favor the crypto market, with new President Donald Trump publicly declaring plans to make the country the “crypto capital of the planet.” Coinbase’s stock soared almost 40% since the election results became official, and it is up over 70% this year.
Though there are short-term growth concerns with Coinbase including the recent earnings miss, the long-term outlook of the stock is definitely positive. Coinbase’s fundamentals are also now stronger than before, with five consecutive profitable quarters after nearly two years of losses.
Coinbase’s recent announcement of $1 billion stock buyback is also a great sign of the company’s confidence in its long-term outlook and success.
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5. Meta Platforms (META): Average annualized return of 25%
Meta (NASDAQ:META) owns some of the world’s largest social media platforms, including Facebook, WhatsApp, Messenger and Instagram. The social media company’s control and use of user data has attracted a lot of controversies and concerns around the globe, and this has inspired the company to prepare for the next-gen internet.
Meta CEO Mark Zuckerberg is slowly shifting the company’s focus to the development of a ’Metaverse’, which includes blockchain, AI technology, and virtual and augmented reality (AR) features. In aid of this, the company has raised its AI capital expenditure guidance for 2025.
Meta, in fact, has already started to leverage its expertise in AI and augmented reality. Recently, the company launched its AR glasses, Orion, and also released its most affordable ‘mixed-reality’ headset, Meta Quest 36.
Analysts are also bullish on the stock and expect a significant increase in the company’s revenue. Wall Street recommends the stock as a “Strong Buy,” and believes AI will drive further growth for Meta platforms going forward. Meta’s stock is already up almost 70% this year.
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6. Amazon (AMZN): average annualized return of 33%
E-commerce giant Amazon (NASDAQ:AMZN) could play a major role in providing the computing power needed to validate or verify transactions on blockchain networks. In fact, Amazon Web Services (AWS) helps run most major blockchains, including 25% of Ethereum nodes.
Amazon Web Services (AWS) already enjoys about 31% market share in the worldwide cloud infrastructure market. Moreover, AWS’ AI unit is a multibillion-dollar revenue-run rate business that is growing at a triple-digit year-over-year rate.
Though the demand from blockchains is not the only source that drives Amazon’s overall growth, the growth of Web3 will definitely increase the size of the cloud computing market, and in turn, Amazon’s revenue.
Like Meta Platforms, Amazon is also making noteworthy investments to capture opportunities in AI. The online retailing giant has already made capital investments of $51.9 billion this year, and expects the full-year capex to be around $75 billion.
Amazon reported upbeat Q3 results with EPS surging by over 50%, driven by the robust performance of the company’s retail, AWS, and ad businesses. The stock is up almost 40% this year.
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7. Roblox (RBLX): Average annualized return of -6%
Roblox (NYSE:RBLX) is an online entertainment company that enables entirely user-generated worlds and environments. The company is investing heavily in social gaming with the objective of developing the largest social gaming space.
Analysts have argued that Roblox is currently the closest thing to a functioning Metaverse.
The company has 70.2 million daily active users. About half of its users are below the age of 13, potentially positioning the platform as part of the internet’s next generation.
Roblox CEO David Baszucki recently told CNBC that NFTs and other digital assets would be able to move seamlessly across the Roblox ecosystem, including from other Web3 platforms. Such capabilities mean the company could grow faster than most other gaming and social media platforms in the future.
Earlier this month, the company reported stellar Q3 results with revenue up almost 29%. The management expects a similar performance for the next quarter, suggesting ongoing market confidence in its products. Roblox shares are up over 70% in six months.
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8. Applied Digital (APLD): Average annualized return of -4%
Applied Digital (NASDAQ:APLD) develops and operates data centers that support the running of powerful computer programs, including those that are required in crypto mining, blockchain, and the creation of decentralized apps (dApps).
Applied Digital maintained strong momentum in 2024, delivering spectacular top-line expansion in back-to-back quarters. The stock is up over 100% in six months.
Last month, the company reported its fiscal third-quarter results with revenue up 67% from the fiscal first quarter 2024. The company was able to narrow its loss from $11.5 million from the fiscal first quarter of 2024 to $4.3 million.
Applied Digital has significantly improved its balance sheet due to strategic investments from a group of institutional investors and related companies, including NVIDIA. The company plans to use the investments to develop high-return projects in the digital infrastructure sector.
Currently, the company is constructing a state-of-the-art, 369,000+ square-foot facility for HPC (high-performance computing) applications, including artificial intelligence. Though power outages still remain a concern for the company, it remains optimistic about its long-term growth.
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What are Web3 stocks?
Web3 is the next generation of the internet, where users get direct ownership over their digital identity and assets. It is also an umbrella term for all next-gen concepts, including decentralization, blockchain, artificial intelligence (AI), virtual reality (VR), and augmented reality (AR).
The current form of the internet is subject to several major criticisms regarding user privacy and data. Web3, due to its decentralized nature, has the potential to address such concerns by shifting from an ‘internet of information’ to an ‘internet of value.’
Thus companies that are connected to Web3 in any form, be it a payment service provider, networking companies, chip makers, and more, are Web3 stocks. In other words, Web3 stocks are companies that are leading the development and implementation of new internet technologies.
Pros and cons of investing in Web3 stocks
Even though Web3 is perceived as the people’s internet, it still has its risks. Let’s look at the pros and cons of investing in Web3 stocks.
Pros
- Decentralization: Web3 will eliminate intermediaries, thereby lowering the risk of single points of failure and censorship. It also means users get more control over their data.
- Innovation: Web3 itself is an innovative concept, and it encourages more innovation by offering a flexible and open platform for developers to create dApps and smart contracts.
- Massive potential: Many see Web3 as the ‘next big thing’. Similar to Bitcoin, this next generation of the Internet could help early investors make a lot of money.
- Fractional ownership: Officially owning some part of an asset is rarely possible in the real world. Web3, however, will allow users to diversify their portfolios across multiple assets through fractional ownership of valuable assets, such as a piece of real estate or artwork.
- Liquidity: Traditional assets may be difficult to sell quickly, but digital assets on Web3 will enjoy full liquidity through secondary trading platforms and decentralized finance (DeFi) protocols.
Cons:
- Regulatory uncertainty: Web3 is still in its very early stages. Thus, the regulations surrounding this next internet revolution are unclear.
- Technological risks: The technology behind Web3 can be complex, which may discourage it from mainstream adoption. Moreover, like any other tech, Web3 may also be vulnerable to cybersecurity threats.
- Volatility: Cryptocurrencies have existed for more than a decade now, but they are still considered highly volatile. The same could be true about assets based on Web3 tech.
- Counterparty risk: Even though blockchain technology is fully transparent, crypto investors still face counterpart risks when dealing with trading platforms or issuers. Such risks are expected to be prevalent with Web3 as well.
How to invest in Web3
Tech companies are pouring billions of dollars into developing Web3 capabilities, suggesting the massive potential of this still relatively new concept. You can also benefit from Web3’s potential by choosing an investment vehicle that suits your risk appetite.
Though Web3 offers investors different investment vehicles, two of the best and easiest ways to invest in Web3 are:
Invest in stocks related to Web3
Investing directly into companies actively engaged in Web3 technologies is the easiest and most reliable way to invest in Web3. However, with Web3 still in its infancy, it’s important that you stick to established names when selecting Web3 stocks.
Most companies working on Web3 are Web2 companies, such as Meta, Amazon, NVIDIA, and others. These established companies have already invested billions of dollars in developing Web3 capabilities.
Buy Web3 related cryptocurrencies
Cryptocurrency is decentralized money and, thus, is expected to play a very important role in Web3, which itself is a decentralized form of the internet. With this in mind, investing in Web3 crypto could be a smarter way to benefit from the Web3 revolution.
Several crypto companies, such as Coinbase, are developing their Web3 capabilities. So, buying their tokens or native coins will directly give you exposure to directly participate in Web3.
Methodology: How we chose the best web3 stocks
We conducted comprehensive research and analysis of Web3-related stocks in different industries, such as payments, crypto, and more. For our list, we only considered established names with significant exposure to Web3 applications.
Additionally, we analyzed each stock on several user-centric parameters. Some of those parameters are:
Investments: We only considered stocks that have made significant investments in developing Web3 capabilities over the past few years and plan to boost those investments going forward.
Web3 capabilities: Companies that already have Web3 capabilities scored high on our list. Coinbase, for instance, already deals in crypto and is thus well poised to benefit from the Web3 revolution.
Stock performance: Web3 stocks that have performed well lately found a place on our list. We also considered analysts’ ratings and price targets on the stocks.
Earnings growth: Companies that have shown stable earnings growth over the past few years ranked high on our list. We also considered how much of those earnings came from their association with Web3.
Leadership: We also considered the leadership and top-level management of the companies. A company whose top executives have deep experience with Web3-related applications is more likely to adopt Web3 sooner than other companies.
Web3 stocks FAQs
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References
- Jack Dorsey dramatically scales back crypto ambitions for Block, CNBC (2024)
- Square Launches Orders Platform, Block (2024)
- Nvidia’s stock is up nearly 200% this year, and a critical time for tech awaits, MarketWatch (2024)
- Coinbase CEO Brian Armstrong is more than $2 billion richer after post-election stock pop, CNBC (2024)
- Meta sees AI spending accelerating as earnings top forecasts, Financial Times (2024)
- Amazon Maintains Cloud Lead as Microsoft Edges Closer, Statista (2024)
- Roblox CEO David Baszucki Envisions Future In-Game NFTs in Open Ecosystem, PlayToEarn (2023)
- Applied Digital Reports Fiscal Third Quarter 2024 Results, Applied Digital (2024)
