This Pick-and-Shovel Bitcoin Mining Stock Could Bring Decades of Profits

Money Morning Director of Technology & Venture Capital Research Michael Robinson is still a big fan of Bitcoin and many of the other cryptocurrencies out there. But he acknowledges that they are not for everyone.

According to Michael, the marketplace for cryptos has gotten too risky for the average investor to navigate safely.

So instead, he's bringing Money Morning Members a pick-and-shovel Bitcoin mining stock today. It offers tremendous upside with just a fraction of the risk of cryptocurrencies...

There are numerous issues still plaguing cryptos right now, including: threats of regulation, actual regulation, comments from assorted government officials, market manipulation, and good old-fashioned hype.

Robinson believes all these issues will resolve, but until they do, the time is not quite right to dive back into the actual cryptos. He assured his readers that when the time is right, he'll give you the "go" signal.

But even now, when the market seems crazy, there are still ways to profit without having to buy Bitcoin or any other crypto coin.

Several weeks ago, he recommended Microsoft Corp. (Nasdaq: MSFT) for its use of blockchain technology as a key part of its Azure cloud computing platform. It was a great software play on cryptocurrencies in the grand tradition of the pick-and-shovel method of investing. Own the tools that others use to mine their fortunes. MSFT stock alone is up nearly 43% in the last year.

But there is another way to own the picks and shovels, and that's investing in the hardware used for mining.

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Bitcoin and other coins are "mined" on very advanced computers with a lot of raw processing power.

Sure, it's theoretically possible to mine bitcoins on your home computer, but realistically, even computers armed with the top gaming and virtual reality capabilities are still far too undersized to compete with the installations of professional coin miners.

The Bitcoin mining stock Robinson is bringing readers today is a Silicon Valley semiconductor leader whose programmable chips are favorites of industrial-grade Bitcoin miners. And its crypto mining chips recently helped it record rising revenue for nine straight quarters.

But it does not have all its corporate eggs in the cryptocurrency basket.

This company ranks as one of the most advanced chip designers in the world, and 47% of sales come from aerospace and defense. Another 35% of sales come from the communications and data center segments. Most of the rest of sales are derived from the broadcast, consumer, and automotive sectors.

The combined value of all those sectors is a beefy $2.6 trillion. And the company's current R&D efforts are aimed at tapping into new fields that will grow into massive ones.

Here's one of the best Bitcoin stocks on the market today...

Here's Our Top Bitcoin Mining Stock for 2018

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This innovation powerhouse is Xilinx Inc. (Nasdaq: XLNX), and it's building a platform of chips not just for the next year, but for the next decade or longer.

Many of today's miners seek out Xilinx's advanced logic chip, known as a "field programmable gate array" (FPGA). This is a very powerful integrated circuit that can blaze through complex calculations. And as the name implies, FPGAs can be programmed out in the field - allowing users to tweak them to meet specific needs.

Xilinx already booked $8 million in Bitcoin FPGA sales in just the first few weeks of 2018.

The company has been building what it calls the "Xilinx Deep Neural Network Library." This is a set of tools will help Xilinx's clients customize their FPGAs to handle a broad range of machine learning applications.

Machine learning is the field where machines are "trained" to take action on their own - without programming. The analysts at MarketsandMarkets say the sector will grow from $1.41 billion in 2017 to $8.81 billion by 2022. That's an impressive compound annual growth rate of 44.1%.

And as if riding some of the hottest technologies - cryptocurrencies and blockchain - is not enough, Xilinx's chips support autonomous driving features and self-driving cars. The firm is seeing growing demand for its chips that can handle image and video processing, object recognition, and analytics - and that will help collision avoidance systems to work 100% of the time.

And that's not the only catalyst for this stock...

While investing on the hopes that a company will be acquired by another is usually not the best way to picks stocks, it does pay to take note when the possibility exists. Barron's reported just this week that RBC Capital's Amit Daryanani placed Xilinx on a short list of possible next acquisition targets for rival chip maker Broadcom Ltd. (Nasdaq: AVGO), should its possible deal with Qualcomm Inc. (Nasdaq: QCOM) fall through.

Any stock on such a list becomes "in play," and other suitors may step up. But again, this is not why Robinson is sweet on Xilinx. Consider it just a positive bit of news that can only help support the stock price as it works through the headwinds created by the company's surge in R&D spending planned for this year.

Either way, investors win.

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