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Blockchain-powered cryptocurrency made a major comeback in 2023 after a massive sell-off in 2022 on recession concerns, inflationary pressure, and higher interest rates. The strong year-to-date rally in the most popular cryptocurrencies, Bitcoin, Ethereum, Cardano, and Dogecoin, which have gained 155.35%, 95.45%, 149.44%, and 33.83%, respectively, testifies to the current crypto boom.

The primary reason behind this boom is the Federal Reserve’s pause on interest rate hikes. The Fed has held interest rates unchanged at 5.25% to 5.5% for the third successive meeting. It has also signaled three rate cuts in 2024.

Growing optimism among investors, owing to the fact that the Securities and Exchange Commission (SEC) will finally begin approving crypto spot ETF filings after stalling approval of these applications several times, remains another major positive.

Risk Persists

However, the lack of proper regulation and reliability in the cryptocurrency market remains a big concern. Increasing regulatory concerns over crypto transactions and crypto mining that witness greater governmental control are negatives.

Further, the market is highly volatile, which is a serious risk. Shares of notable Bitcoin miners, namely Riot Platforms (RIOT - Free Report) and Marathon Digital (MARA - Free Report), tumbled in recent trading, plunging 5.5% and 9.5%, respectively.

Investors are turning bearish about the fact that the Bitcoin miners are required to make heavy investments in mining equipment, which, in turn, is making them heavily leveraged. This may lead to high volatility in such stocks.

Recently, Riot Platforms executed a purchase option and updated its long-term purchase agreement with MicroBT, under which it placed a purchase order for 66,560 MicroBT miners for $290.5 million. Meanwhile, Marathon announced the purchase of two Bitcoin mining sites — one in Texas and one in Nebraska — for $178.6 million.

In addition, fears of a recession in 2024 still remain. At least, the anticipation of a soft landing for the U.S. economy in 2024, which will include a slowdown in GDP growth, remains a headwind.

Our Stock Picks

Given this uncertain scenario, it is a prudent idea to pick stocks that are highly reputed and financially resilient.

Here, we have picked NVIDIA (NVDA - Free Report), Meta Platforms (META - Free Report), and CrowdStrike (CRWD - Free Report), which not only have taken an interest in cryptocurrencies, but also have strong positions in booming markets like generative AI, social media platforms, and cybersecurity, among others that are comparatively stable and hold immense growth prospects.

Year-to-Date Price Performance

Image Source: Zacks Investment Research

Notably, these stocks have returned more than 100% in 2023, thanks to their fundamental strength. Additionally, the aforementioned stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #2 (Buy). Per Zacks’ proprietary methodology, stocks with such a favorable combination often offer solid investment opportunities.

NVIDIA (NVDA)

This company has gained 239.1% year-to-date. It is known to be the worldwide leader in visual computing technologies and the inventor of the graphic processing unit or GPU. It is witnessing the growing momentum of its GPUs in the cryptocurrency space. Nevertheless, the company’s GPUs are also gaining solid momentum in generative AI and large language model-powered applications, which hold promises of growth.

This apart, solid hyperscale demand and a strong uptake of AI-based smart cockpit infotainment solutions are acting as tailwinds. Further, NVIDIA’s collaborations with Mercedes-Benz and Audi are expected to advance its presence in autonomous vehicles and other automotive electronics space.

Currently, NVDA carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Estimates for the company's fiscal 2025 earnings have moved north by 1% to $19.91 per share over the last 30 days.

Meta Platforms (META)

This company, which has already bid adieu to its cryptocurrency project Diem, is exploring ways to use blockchain-based assets in digital payments.

Meta shares have surged 197.7% on a year-to-date basis. It is benefiting from steady user growth across all regions, particularly the Asia Pacific. Increased engagement on Instagram, WhatsApp, Messenger, and Facebook has been a major growth driver. The company is experiencing traffic growth on Instagram and Facebook, owing to its usage of AI to recommend.

In addition, Meta’s growing efforts in the generative AI space, into which it made its foray with Large Language Model Meta AI (“Llama”), remain noteworthy.

Currently, META carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Estimates for the company's 2024 earnings have moved north by 0.1% to $17.57 per share over the last 30 days.

CrowdStrike (CRWD)

This company’s discovery of the first-ever Dero cryptojacking operation targeting Kubernetes infrastructure remains noteworthy. Nevertheless, the company is currently benefiting from the solid demand for cyber-security solutions. CRWD has rallied 145% in the year-to-date period.

An increasing number of data breaches and the growing need for security and networking products due to the ongoing hybrid working trend are leading to the uptake of CRWD’s solutions. Also, the digital transformation and cloud migration initiatives being taken by various organizations are expected to continue boosting the company’s end-market demand.

Currently, CRWD carries a Zacks Rank #2 (Buy) and has a Growth Score of A. Estimates for the company's fiscal 2025 earnings have moved north by 3.4% to $3.64 per share over the last 30 days.

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