Do you like NFTs? These 3 Nasdaq stocks are worth a closer look
The crypto revolution has taken Wall Street by storm and, as you would expect with cutting edge technology, many companies looking to innovate in the crypto space are among those you will find in the Nasdaq Composite (NASDAQINDEX: ^ IXIC). In particular, non-fungible tokens (NFTs) have become a hot item in recent weeks, with NFT-related art auctions bringing in tens of millions of dollars.
Investors always want to find ways to take advantage of big trends, and while investing directly in NFTs is always an option, another way is to find the companies that are helping make the NFT craze a reality. A Nasdaq share, Hall of Fame Resort & Entertainment (NASDAQ: HOFV), receives a huge boost on Monday even as the Nasdaq Composite itself was down, and it is able to continue to do well as long as demand for NFT remains high. Meanwhile, two more actions – Funko (NASDAQ: FNKO) and Jiayin Group (NASDAQ: JFIN) – took a break on Monday, but some are hoping they can also make a splash in the NFT world in time.
A Hall of Fame performance
Shares of Hall of Fame Resort & Entertainment rose 17%. The company’s recent partnership with Fun with dolphins producing football-themed NFTs was once again noticed as Wall Street analysts viewed the partnership favorably.
In particular, analysts at Maxim pointed to the deal by increasing its target price on Dolphin stock. Maxim sees the partnership and strategic shift to NFTs as potentially transformative for Dolphin, but investors might say that many of the the same things about Hall of Fame cases. As an affiliate of the Ohio Pro Football Hall of Fame, Hall of Fame Resort & Entertainment sales have been minimal at best and losses have been substantial.
What is not clear is how valuable NFTs produced using Hall of Fame content will be. The National Football League (NFL) retains extensive ownership rights to its content, and many expect the NFL to make its own deals for the production of NFT if the market proves successful. It could pose a long-term threat to the Hall of Fame’s prospects, even if it does manage to pique the interest of football fans. Still, the company sees a lot of upside on Monday, and there could be more depending on how the deal goes.
Other routes to DTV
Hall of Fame is certainly not the only way to play the NFT trend. Other companies are looking to do much the same with their own businesses.
For example, Funko has a long history of making collectible toys, including action figures, plush dolls, and other pop culture merchandise. By linking limited edition toys to NFTs, Funko hopes to capitalize on both trends and find a new audience for its product lines. Its stock remained close to flat on Monday.
However, speculation about a possible future involvement of the NFT creates volatility in other stocks. For example, Jiayin fell 6% on Monday as investors failed to see the follow-up they were hoping for regarding suggestions that the Chinese fintech company could start to venture into non-fungible tokens.
As with any other fashionable trend, there is a lot of uncertainty in the NFT space right now. Rumors fly and not all of them will come true. Additionally, the NFT field itself is only just beginning, and an influx of supply could crush the market before it really takes off.
Investors should nonetheless be aware of stocks seeking to enter the NFT industry. As long as crypto remains popular, non-fungible tokens are likely to be an angle that traders look to play for profit.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.