Get ready to explore the transformative metaverse! When Facebook rebranded as Meta Platforms Inc. (META), the concept of a virtual world where people live, work, and play took center stage. The metaverse market is projected to reach $700 billion by 2030, according to ResearchAndMarkets.com. These companies are leading the way in shaping the metaverse, offering exciting opportunities for investors. Join us on this journey as we delve into the metaverse and discover the limitless possibilities it holds. To tap into this potential, we present 7 metaverse stocks to consider investing in today.
1. Meta Platforms Inc. (META)
CEO Mark Zuckerberg’s commitment to prioritizing the metaverse led to a significant change in his social media giant, Facebook, which was renamed Meta Platforms in late 2021. Meta’s Reality Labs unit is at the forefront of developing virtual reality and augmented reality technology to bring the metaverse to life. However, Zuckerberg’s ambitious metaverse vision has encountered some challenges. Reality Labs reported a loss of $9.4 billion in the first three quarters of 2022, and the company expects these operating losses to increase significantly in 2023. Despite this setback, investors who believe in Zuckerberg’s long-term vision can currently purchase META shares at a discounted price, 55% lower than when Facebook announced its name change.
2. Unity Software Inc. (U)
Unity Software, a leading company in the realm of 3D video game engines, empowers designers to customize the movement and interactions of players within their games. Furthermore, Unity extends its reach beyond gaming and caters to various industries such as industrial, architectural, animation, and engineering. John Riccitiello, the CEO of Unity, envisions a metaverse with countless destinations accessible through headsets, glasses, computers, consoles, and smartphones, where users can adopt different avatars for different virtual worlds. Riccitiello emphasizes that today’s metaverse transcends the boundaries of 1990s science fiction. Despite a challenging year in 2022, investors now have the opportunity to purchase Unity shares at a discount of over 30% compared to their initial public offering price of $52 in 2020.
3. Microsoft Corp. (MSFT)
Microsoft Corp. (MSFT), on the other hand, stands as a frontrunner in the professional metaverse arena. Microsoft’s enterprise metaverse endeavors encompass the integration of the Internet of Things, digital twins, and mixed reality, bolstering its dominance in the professional software market. The company’s rapidly expanding cloud business provides it with substantial advantages in terms of metaverse network scale. If its pending acquisition of video game giant Activision Blizzard Inc. (ATVI) comes to fruition, Microsoft may also make a bold entry into the social metaverse space. However, regulatory scrutiny poses a challenge to this deal. In October 2022, Microsoft forged a partnership with Meta Platforms, planning to bring its professional software and apps, including Mesh for Microsoft Teams, to Meta’s Quest VR headsets.
4. Roblox Corp. (RBLX)
Roblox Corp. (RBLX) offers an online entertainment platform that is often considered the closest thing to a functioning metaverse at present. This platform enables creators to develop games and boasts over 50 million daily active users. With its own digital currency and a wide range of unique virtual experiences, Roblox appeals to a user base where nearly half are under the age of 13, potentially positioning the company strongly for the future. CEO David Baszucki expressed optimism, stating that this type of technology will support global connectivity and interactions in numerous ways.
5. Nvidia Corp. (NVDA)
NVDA is known for producing graphics and video-processing chips used in high-end computing servers, supercomputers, and applications related to artificial intelligence and virtual reality. Considering the immense processing power required for the metaverse, Nvidia’s chips are expected to play a critical role. Nvidia Omniverse, a real-time reference development platform, facilitates the construction and operation of metaverse applications. CEO Jensen Huang highlighted the importance of a unified data platform like the internet and emphasized that Omniverse is accomplishing the same for companies dealing with 3D data.
6. Adobe Inc. (ADBE)
Adobe Inc. (ADBE), a specialist in creative content creation software, has made significant investments in 3D and immersive technology. Adobe Substance 3D, a suite of tools and services, supports the creation of 3D content. In October 2022, Adobe announced its collaboration with Meta’s Quest platform, bringing its Substance 3D portfolio to the table. Adobe has also partnered with renowned brands such as Coca-Cola Co. (KO), Epic Games (the creator of “Fortnite”), Nvidia, Nasdaq, and others, assisting them in crafting distinctive 3D content and immersive digital experiences. Scott Belsky, the Chief Product Officer and Executive Vice President of Adobe Creative Cloud, underscores the pivotal role of rich features, personalization, captivating interactivity, and immersive content in determining the success of the metaverse and other immersive experiences.
7. Autodesk Inc. (ADSK)
Autodesk Inc. (ADSK) specializes in providing software for designing buildings and goods. Architects and engineers employ Autodesk’s Revit building information modeling program to create virtual models of structures, and Autodesk Rendering can transform these models into virtual reality environments. Approximately 45% of Autodesk’s business stems from design software tailored for architecture, engineering, and construction (AEC). Autodesk boasts a suite of products explicitly designed for constructing virtual reality and augmented reality 3D animations and buildings, making it an ideal fit for metaverse construction. In the third quarter, Autodesk witnessed a 16% increase in total billings, with AEC segment revenue growing by 13% to reach $575 million.
The metaverse is a rapidly emerging concept that offers immense potential for investors. As the virtual world continues to evolve, companies at the forefront of metaverse development are poised to benefit from this transformative technology. Meta Platforms Inc. (META), Unity Software Inc. (U), Microsoft Corp. (MSFT), Roblox Corp. (RBLX), Nvidia Corp. (NVDA), Adobe Inc. (ADBE), and Autodesk Inc. (ADSK) are among the top metaverse stocks worth considering. Each company brings unique strengths and expertise to the table, shaping the metaverse landscape in their respective domains. From virtual reality and augmented reality technology to gaming platforms and software solutions, these companies offer exciting opportunities for investors looking to tap into the metaverse’s potential.
Why should I consider investing in metaverse stocks?
Investing in metaverse stocks allows you to potentially capitalize on the growth and opportunities presented by this emerging technology. As the metaverse expands and gains mainstream adoption, companies involved in its development could experience significant growth and generate substantial returns for investors.
Are metaverse stocks risky investments?
Like any investment, metaverse stocks carry their own risks. The metaverse market is still evolving, and there may be uncertainties and challenges along the way. It’s essential to thoroughly research and understand the companies you’re considering investing in and carefully evaluate their long-term prospects.
How can I evaluate the potential of metaverse stocks?
When evaluating metaverse stocks, consider factors such as the company’s technological advancements, partnerships, market positioning, financial stability, and leadership vision. Additionally, keep an eye on industry trends, user adoption, and regulatory developments that could impact the metaverse landscape.
Should I diversify my portfolio with metaverse stocks?
Diversification is generally a prudent strategy when investing. While metaverse stocks offer exciting potential, it’s crucial to maintain a well-diversified portfolio across different sectors and asset classes to mitigate risk. Consider your investment goals, and risk tolerance, and consult with a financial advisor to determine the appropriate allocation for metaverse stocks in your portfolio.