Don't Miss AI's Third Wave
Investors’ appetite for technology stocks have waned, as evidenced by the significant drops in share prices. However, interest in digital assets is growing. Many people fear missing out on outsized gains, despite the higher volatility versus stocks.
Regular investors, however, must consider the volatile nature of Bitcoin and other cryptos. You must be prepared for wild price swings. It’s the reason financial experts suggest investing money you can afford to lose. The chance of making and losing money is 50/50.
In the tech sector, BlackBerry (TSX:BB)(NYSE:BB) is among the popular growth stocks. However, it continues to outperform and trades at a deep discount (-25.63% year to date). Galaxy Digital (TSX:GLXY), an asset management firm, has better earnings growth potential than the former smartphone maker. It’s also a crypto stock and a safer alternative to gain exposure to the cryptocurrency market.
Top- and bottom-line declines
In fiscal 2022 (year ended February 28, 2022), BlackBerry reported 19.6% and 37.5% declines in revenue and earnings versus fiscal 2021. At $18.79 per share today, the trailing one-year price return is 18.38%. Moreover, the tech stock has lost 31.11% in 3.01 years.
Notably, the net free cash flow of $36 million for the said fiscal year was 51.4% smaller compared to the previous one. Still, management cited the sustained demand for cybersecurity and Internet-of-Things (IoT) products as significant tailwinds for BlackBerry.
The highlights for Q4 fiscal 2021 include the team up with PATEO in China. BlackBerry will incorporate its IVY platform into the connected car company’s intelligent Digital Cockpit solution. The increasing consolidation of digital cockpits is a positive development that augurs well for this $2 billion Canadian tech firm.
For fiscal 2023, management projects a revenue range between $200 and $210 million, which represents 12-18% year-over-year growth. BlackBerry also anticipates its cyber business billings to grow by 8-12% due to increased uptake of security products.
There’s also high hope for the auto industry, although the global chip shortage owing to supply chain disruptions and the Russia-Ukraine war are serious headwinds.
Scaling new heights
Galaxy Digital operates in the digital asset, cryptocurrency, and blockchain technology industry. The crypto stock is down 7.33% year to date ($20.99 per share), yet market analysts are bullish. Their 12-month average and high price targets are $36 (+71.5%) and $48 (+128.7%), respectively.
Michael Novogratz, founder and CEO of Galaxy Digital, said, “2021 was a transformational year for both Galaxy Digital and our industry. While providing shareholders a net comprehensive income of $1.7 billion for the full year 2021.” In 2021, the year-over-year increase in net income compared to 2020 was 344.7%.
Novogratz added, “We remain committed to scaling our platform services, and building the pre-eminent technology-driven financial services and investment management firm, a strategy I firmly believe will continue enhancing long-term shareholder value.”
The 6.92 billion company has five business segments that contribute to revenues. It boasts a multi-disciplinary team with extensive experience in investing, portfolio management, capital markets, operations, and blockchain technology. Performance-wise, Galaxy’s total return in 3.01 years is a fantastic 686.14% (98.59% CAGR).
Less-risky options
Galaxy Digital appears to offer better value than BlackBerry today. However, both are stocks are less-risky options compared to cryptocurrencies. Investors must exercise caution investing in a decentralized environment, because there’s no customer protection.
