Prepare yourself to enter the metaverse.
The concept of virtual reality (VR) has been prevalent in works of science fiction literature and film for a very long time. A “place” that attempts to combine the physical and digital worlds into a single cohesive whole. Fiction is quickly becoming reality as a result of advances in virtual reality (VR) technology and computer capacity, which is boosting demand not just in this sector but also for metaverse stocks.
There is a great deal of potential for the metaverse to become just as large as the internet. At the very least, that is the plan.
At its heart, it is a domain that would work similarly to the internet that we are used to, but it would be one in which our avatars would be able to navigate and engage. In addition to this, it would be entirely self-sufficient economically.
A plethora of firms are working toward the goal of making the metaverse a reality. For instance, Epic Games’ immensely popular Fortnite video game has virtual concerts, such as the one featuring Ariana Grande that took place at the beginning of August. The payments company Visa (V) just lately acquired a non-fungible token (NFT) in order to assist it in better comprehending the non-physical realm of digital commerce. And a mega-cap social media firm has recently changed its name after decades of using its previous moniker in order to represent its tremendous expansion into the technology sector. (I will elaborate more on it in a minute.)
When it comes to the equities of the metaverse, however, there is a significant amount of potential available to investors. According to predictions provided by Bloomberg Intelligence, the size of the metaverse industry might reach a staggering $800 billion by the year 2024.
In the next article, we will take a look at ten different metaverse companies, nine of which are publicly listed companies and one of which is an exchange-traded fund (ETF).
Best Metaverse Stocks To Invest In
- Metaverse sector: Infrastructure
- Market value: $6.3 billion
Get yourself prepared for the metaverse.
Since its inception, virtual reality (VR) has featured prominently in works of science fiction literature and film. A “place” that aims to combine the actual world with the digital world into a single entity. As a result of advances in virtual reality (VR) technology and computer capacity, fiction is quickly becoming reality, which is boosting demand not just in this sector but also for metaverse stocks.
The internet may not be able to compete with the potential scale of the metaverse. At least, that seems to be the plan.
At its heart, it is a world that would work similarly to the internet as we know it, but it would also be a realm in which our avatars could travel and take part in activities. In addition to this, it would have its own independent economy.
Numerous businesses are working toward the goal of bringing the metaverse into existence. For instance, Epic Games’s widely played Fortnite video game has virtual concerts, such as the one featuring Ariana Grande that took place at the beginning of August. Visa (V), a company that processes payments, has just acquired a non-fungible token (NFT) with the intention of gaining a deeper comprehension of the non-physical commerce sector. In addition, a mega-cap social media firm recently changed its long-standing moniker in order to more accurately represent its huge expansion into the technology sector. (I will say more about it in a minute.)
When it comes to investing in metaverse equities, there is a large amount of potential from an investor’s point of view. According to predictions provided by Bloomberg Intelligence, the size of the metaverse industry may reach a staggering $800 billion by the year 2024.
In the next article, we will discuss ten potential winners in the next wave of technology: nine individual equities and one exchange-traded fund (ETF) that invest in the metaverse.
- Metaverse sector: Infrastructure
- Market value: $745.0 billion
Nvidia (NVDA, now trading at $297.52) has been recommended as one of the top stocks in the semiconductor industry to purchase for the long term on several occasions. It should not come as a surprise that the company’s expansion into the fields of artificial intelligence (AI) and other fast-processing chips has enabled it to become a formidable competitor in the market for metaverse equities.
Chipsets manufactured by NVDA are already being integrated into a wide range of servers and other types of centralised computers that are required to do sophisticated computations. This consists of edge computing systems that are operated by companies such as Fastly. Nvidia is probably certain to be one of the most successful companies to emerge from the metaverse revolution as a result of their leading position and their ability to act quickly.
The impending acquisition of ARM Holdings from SoftBank Group is another another reason why this company has an even brighter future ahead of it. ARM is a significant participant in the patents and software that make it possible for chips to be integrated into computer systems. NVDA will be able to expand up its end-to-end ecosystem after the purchase thanks to the acquisition. In other words, it is able to directly integrate its graphics processing unit (GPU) as well as other modern processors into additional computer systems, hence increasing the amount of computing power available. And in order for the metaverse to function, this level of computational power is required.
And despite the fact that its nearly $40 billion takeover of ARM is far from certain – with U.K. authorities being among the most recent to raise antitrust concerns — NVDA is still a contender to emerge victorious from the metaverse. After all, its processors continue to establish themselves as the industry standard when it comes to doing high-speed computations and processing.
- Metaverse sector: Virtual platform
- Market value: $47.5 billion
It may seem like an unusual decision for a fashion business like Gucci to debut an exclusive event with a video game, but the fact that they did so demonstrates the growing power of the metaverse and how Roblox (RBLX, $77.99) is helping to construct this future.
RBLX seems to be a video game at first glance. a really well-known one at that. The business has 43.2 million people who utilise its services on a daily basis, and they registered 9.7 billion hours of interaction during the second quarter.
The problem is that it’s not actually just one game at all. Users of Roblox have access to a wide variety of games, content, and other forms of entertainment thanks to third-party producers. The company generates revenue by the sale of its own kind of virtual currency, which users may employ to get access to various games, experiences, and material, as well as to purchase virtual apparel for their avatars, such as a Gucci bag.
The truth is that Roblox’s game already has the fundamentals necessary to support the metaverse concept. And it’s going even farther in that direction.
During a recent earnings call with investors, the CEO of Roblox, Dave Baszucki, remarked that the company’s platform “welcomes six-year olds while simultaneously welcoming 30-year olds.” Baszucki said that ultimately, Roblox views its platform as a virtual environment where these kind of immersive activities, such as concerts, are “going on all the time, just as play is happening on all the time right now.”
In order to make this a reality, RBLX is shelling out a significant amount of money on personnel and acquisitions in order to construct its own version of the metaverse. One striking illustration of this is the company’s recent acquisition of Guilded, a platform that aims to bring together different gaming groups.
Roblox, the firm, is continuing to experience rising sales as a direct result of both the platform it operates on and the business strategy it employs. The company’s revenue for the most recent quarter jumped by an astounding 126 percent when compared to the same period last year. This comes after a year-over-year growth in revenue that was more than 140 percent in the first quarter.
This metaverse company might be a potent pick for portfolios given its leading position in the foundations of the next generation of technology, given that this wave is expected to arrive soon.
- Metaverse sector: Hardware and apps
- Market value: $934.3 billion
In 2014, when Facebook acquired VR start-up Oculus, Mark Zuckerberg and Meta (FB, $341.13) laid the groundwork for the company’s metaverse ambition. On the overall, Facebook has struggled with its social media section, and it has always appeared like a fad for the company.
Then then, Zuckerberg may finally have the upper hand.
Horizon Workrooms, a new Oculus app from Facebook, became public in August. Users may utilise avatars to participate in meetings using the company’s VR headsets. Virtual whiteboards let them take part in discussions without having to actually be in front of a computer.
Facebook CEO Mark Zuckerberg noted in a recent blog post that “in the future, working together will be one of the key ways people utilise the metaverse.” Facebook seems to be a pioneer in the development of such technologies. This might be a big gain for Facebook in the near future, given the recent spike in work-from-home arrangements owing to COVID-19.
At the end of October, Facebook announced that it will rename itself to “Meta Platforms, Inc.,” or simply “Meta,” in reference to the metaverse. On Dec. 1, the stock’s ticker will change from FB to MVRS. Oculus will be renamed Meta instead of Oculus, but Facebook and many of its other applications will keep their current titles.
As a result of Facebook’s many applications and communications channels, the metaverse is a logical place for the business to focus its attention.
A long-term income stream for content providers on its platform and system might be generated via advertising or fees. Despite the fact that it’s a long way off, Facebook may be able to get there sooner than other companies because of its dominant position in hardware and first-mover status in programmes tailored for work.
Even better, Facebook is a sound investment in the expansion of the metaverse. The company’s profitability and cash flow creation cannot be denied. Investors that are more cautious may feel more at ease with the subject.
- Metaverse sector: Software
- Market value: $70.1 billion
As of this writing, Autodesk (ADSK, $324.52) is the world’s best-known maker of AutoCAD software. As a result of this application engineers and architects are able to develop and produce anything from building projects to goods to infrastructure projects in both two and three dimensions. It’s the industry standard software, and most building projects come into contact with it at some time.
More than $1 billion in sales were made in only the second quarter of this year thanks to the company’s software.
ADSK’s software is already being used to create and construct virtual environments for games and entertainment. Virtual and augmented reality (AR) worlds may be built, animated, and explored using a range of technologies from the company. In the most recent quarter, M&E revenues grew by 10% year-over-year.
When it comes to building the metaverse, Autodesk is a logical option for designers and developers alike.
With recurring revenues accounting for 98 percent of total sales in the most recent quarter, Autodesk has continued to shift its business strategy toward the lucrative SaaS model. Recurring income has resulted in substantial profits for the company. With free cash flow of $186 million, ADSK saw a 23.5 percent increase in second quarter earnings (the cash remaining after a company has paid its expenses, interest on debt, taxes and long-term investments to grow its business).
Investors interested in metaverse stocks can consider Autodesk, which has a lengthy history in 3D design.
- Metaverse sector: Payment services
- Market value: $193.5 billion
It was founded in the 1980s and is best known for its AutoCAD programme. Engineering and architectural professionals may use this tool to visually design and develop buildings, goods, infrastructure projects and more in 2D and 3D. At some time in the lifespan of the majority of construction projects, the software will be used by the project team.
More than $1 billion in sales were made in only the second quarter of this year alone thanks to the company’s software.
ADSK’s software is already being used to create virtual worlds for gaming and entertainment. The company currently has a range of technologies that can render 3D animation, develop and launch virtual buildings, and create inside virtual and augmented reality (AR) environments. Sales of M&E (Materials and Equipment) grew by 10% in the most recent quarter.
There is no better option than Autodesk when it comes to building the metaverse.
With recurring revenues accounting for 98 percent of total sales in the most recent quarter, Autodesk has continued to shift its business strategy toward the lucrative SaaS model. Profits have poured in as a result of the steady flow of recurrent income.. With ADSK’s free cash flow of $186 million in the second quarter, earnings jumped 23.5 percent year over year (the cash remaining after a company has paid its expenses, interest on debt, taxes and long-term investments to grow its business).
Metaverse stock buyers might choose Autodesk because of its strong background in 3D design.
7. Unity Software
- Metaverse sector: Software
- Market value: $42.9 billion
If you like video games, there’s a strong chance you’re utilising Unity Software’s (U, $151.96) technology. U is a major provider of software that aids in the creation of 3D environments by video game designers. At least 71 percent of the top 1,000 mobile games were developed using Unity’s platform, and more than 50 percent of all games were developed using U’s code, according to the company’s own statistics.
Unity’s model is its greatest strength.
The startup is best compared to e-commerce giant Shopify. SHOP is a website builder for non-techies and professionals alike that eliminates the need for complex coding. When it comes to creating both 2D and 3D environments, Unity performs the same thing. Instead of spending hours staring at lines of code, developers can utilise U’s software and platform to focus on what they do best: creating engaging software for the masses.
This fundamental notion has been developed by both Shopify and Unity into a range of side business ventures. As an example, consider companies that provide features like in-game chat or adverts to assist game producers make money off of their games.
That being the case, what makes U a good investment for the metaverse?
The metaverse’s framework has been created by Unity and made available to the general public. Take the video game League of Legends (which runs on the platform of U) and replace its laser cannons with spreadsheets or virtual ice cream and you’ve got the fundamental foundation of what is known as the metaverse concept. Unity has already made it possible for developers to construct a world, for users to purchase and trade items in that world, and for everyone to interact with one other.
I love that Unity receives a share of the profits. As a subscription service, U is based on the subscription-to-the-service model (SaaS). The company reported $273.6 million in revenue for the quarter ending September 30, 2013. The year-over-year increase was 48 percent. The company hasn’t yet made a profit, but the company’s adjusted losses have dropped from $3.2 million to $1.6 million.
And with Unity’s diversification outside of video games, it’s looking more and more like the company will start making money soon.
Is metaverse a good investment?
In the metaverse, an investment is only viable if there is a market for the technology involved. While the hoopla around the metaverse is true, the value of your NFT or virtual land may be worth something today. Nevertheless, if you lose interest, you may be left with little to show for your time and effort.
What company is leading the metaverse?
Digital currency SAND is utilised to conduct transactions on the site. Roblox Corporation (NYSE:RBLX), Nvidia Corporation (NASDAQ:NVDA), and Unity Software Inc. are some of the other important firms that are spearheading the innovation in constructing the metaverse (NYSE:U).
What are the top 5 metaverse stocks to invest in?
It’s best to put your money into firms that are actively working to further the metaverse idea in the future. Five of the best metaverse stocks to purchase are: Meta Platforms Inc. (FB), previously known as Facebook; Nvidia; Roblox (RBLX); Unity Software Inc. (U); or content delivery network provider Cloudflare Inc. (NET).
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