7 Stocks Making Major Metaverse Moves in 2022
InvestorPlace - Stock Market News, Stock Advice & Trading TipsKeep an eye on these seven metaverse stocks that are pushing the needle in the potential $800 billion industry.The...
The metaverse has arguably been one of the top buzzwords since Facebook's much-talked-about rebrand. Little did we know that an Oasis-type virtual world from the 2018 smash-hit Ready Player One would become a reality within a few years. It has gone from fiction to fact, and the world's top metaverse stocks are all looking to jump in on the action.
The metaverse is an integrated virtual environment where people can connect, work and play online. It will function like the internet at its core, but is likely to be highly immersive and integrated. On top of that, it will have an economy unto itself.
However, a lot of patience is needed here. The metaverse concept will take time to blossom into the juggernaut it's expected to come. The market is expected to grow to a whopping $800 billion within a few years.
Hence, investors must tap into the trend early and load up on these metaverse stocks now:
- Meta Platforms (NASDAQ:FB)
- Nvidia (NASDAQ:NVDA)
- Roblox (NYSE: RBLX)
- Autodesk (NASDAQ:ADSK)
- Cloudflare (NYSE:NET)
- Matterport (NASDAQ:MTTR)
- Unity Software (NYSE:U)
Metaverse Stocks: Meta Platforms (FB)
Meta Platforms, formerly known as Facebook, shook up the internet with its strategic shift towards the next technological breakthrough: the metaverse.
The seismic shift came when the company was facing a public relations crisis. However, with the slowdown in user growth, the metaverse pivot was perhaps the need of the hour.
What the metaverse holds for the company is relatively unknown. However, we know Meta Platforms is going all-in to become a potential stalwart in the emerging sector. It has already spent upwards of $60 billion in expanding its metaverse plans from 2014 to 2023.
As we advance, the company's augmented reality (AR) and virtual reality (VR) businesses are likely to blow up and lay the foundation for future growth. With its proven track record for innovation, it won't be surprising if it can cement its positioning in the sector.
Nvidia is an obvious metaverse play considering its leading position in the graphics processing unit (GPU) space. The utility of its GPUs has expanded immensely in sectors such as artificial intelligence (AI), data centers and other verticals apart from gaming.
The GPU giant plans to leverage the power of its robust hardware stack to develop its software capabilities. It has developed a graphics engine called Omniverse, which will enable users to design their metaverses.
Looking ahead, every company will have its metaverse, which is why Omniverse will be of immense value. If it can become the go-to engine for designing virtual worlds, it could be looking at a colossal opportunity down the road.
Moreover, the company's GPUs are arguably the most powerful in its industry. Its cutting-edge graphics chip is likely to be the go-to choice for users catering to metaverse requirements.
Metaverse Stocks: Roblox (RBLX)
Roblox is one of the most popular gaming platforms in the world. Its robust ecosystem enables users to create and share experiences in its creative platform.
The platform is hugely successful with the younger demographic, as most of its users are aged 13 and under. As per its most recent quarter, its daily active users soared past 47 million.
Roblox's 3D platform already has metaverse characteristics and could potentially become a major revenue growth driver. Moreover, it plans to become an advertising titan by leveraging its robust creative platform.
It is already gaining traction with big brands. Additionally, Roblox plans to invest a substantial amount of money into its platform to continue improving the quality of its services. If it can continue to do that, its platform will grow leaps and bounds, making it a successful advertising business.
Autodesk is a leading provider of software tools for engineering and construction markets. Architects and engineers use its building information modeling (BIM) program, Revit, to visualize their designs and subsequently show them to their clients.
Moreover, these designs can then be taken to the next level via plugins such as Autodesk Rendering. Additionally, it offers a whole host of products mainly designed for developing VR and AR 3D animations. Hence, it's evident it can become a perfect fit for the metaverse.
During the third quarter, the company's revenue shot up 13% to $952 million, with subscription revenue forming the bulk of the total. On top of that, GAAP margins remained excellent at roughly 18%. The company's financials are excellent, and it has plenty of internal resources.
Metaverse Stocks: Cloudflare (NET)
Cloudflare is not exactly a metaverse pure-play. However, it is likely to have a massive role in providing the robust networking and data services needed to make the metaverse a reality.
Cloudflare provides an edge-based content delivery network (CDN) that facilitates data efficiency, dependability, speed and safety. Such network characteristics will prove critical in driving the company's growth in the metaverse.
Perhaps every aspect of the metaverse, from avatars to virtual activities, is likely to be defined by software. The content inside the metaverse must be delivered in a timely and reliable manner to keep users engaged.
Fortunately, that's what Cloudflare does well, as its CDN powers a significant portion of the web. Moreover, its rock-solid financial performance is a testament to the quality of its product and the effectiveness of its internal management.
Matterport is a video capture company that allows construction firms to provide virtual tours of buildings that prospective buyers and tenants can use. It saves time for customers that would otherwise go house hunting and expend their energy on the process. In the wake of Covid-19 restrictions, the business model turned out to be a novel idea.
Apart from video capturing services, the company also stores the virtual spaces it scans and offers a suite of design tools. Total subscribers shot up 116% from the prior-year period in its most-recent quarter, and subscription revenue rose 36%.
The sustainability of its business model is questionable, which is why it represents the riskiest play in the sector. However, it could blossom into a top metaverse company down the line.
Metaverse Stocks: Unity Software (U)
Unity Software is the top designer of 3D worlds. According to the company, more than 50% of all games were developed using Unity's engine. Hence, the goal is to leverage its success in playing a massive role in the metaverse sector.
CEO John Riccitiello plans to have more than 60% of metaverse content built on the Unity engine. He believes its technology will be used for monetization, analytics and other related elements inside the metaverse.
It recently acquired visual effects producer Weta Digital for $1.6 billion. Weta's technology has been used in blockbuster films such as Avatar and TV programs like Game of Thrones.
Unity will make Weta's tools available to produce some high-quality 3D content. As Unity addresses the unique requirements in developing metaverse content, it is poised to become a formidable player in the space.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor's of science degree in applied accounting from Oxford Brookes University.
More From InvestorPlace
- Stock Prodigy Who Found NIO at $2… Says Buy THIS Now
- Man Who Called Black Monday: "Prepare Now."
- Get in Now on Tiny $3 "Forever Battery' Stock
- Interested in Crypto? Read This First...
Entrepreneur Editors' Picks
Online Scams Are More Sophisticated Than Ever. Here's How to Shop Safely on Black Friday and Cyber Monday, According to a Cyber Intelligence Expert.
This Guy Saved Barbie From Cultural Extinction. He Did It by Asking One Big Question.
The Top 5 Hot Franchise Categories for 2023, According to One Industry Expert
Why Can't We Resist Black Friday and Cyber Monday? A Behavioral Economist Explains the Psychological Forces That Make Sales Irresistible.
I Couldn't Sleep. I Obsessed Over My Failures. Then I Found the Weirdest Cure.
This Pitch Scored a $250,000 Investment — But It Almost Didn't Happen
Employees Were Demanded to Go Home. Here's How We Invite Them to Come Back.