As the concept grows and many see it as the future of technology, watch these metaverse stocks
Metaverse stocks are on a tear. And it’s not surprising, considering how much investment money has been pouring into these blockchain projects lately.
Imagine a world where everyone can explore their potential without any limitations — a place with no boundaries, only endless possibilities and access for all humankind.
This future is possible through technology like virtual reality (VR) or augmented-reality (AR) apps on your phone. They’re called metaverses by experts in these fields because they provide an alternative way for people to experience things online. To put it into perspective, think about how cool it would be if there were millions more parks than just those near your home.
The metaverse is one of the most promising markets in today’s economy. This means any company with a stake there will be doing well, and metaverse stocks stand to gain from this revolutionary change happening right now.
Therefore, if you want to make sure your portfolio remains updated, you should diversify your holdings with the following names:
- Meta Platforms (NASDAQ:FB)
- Unity Software (NYSE:U)
- Roblox (NYSE: RBLX)
- Autodesk (NASDAQ:ADSK)
- Nvidia (NASDAQ:NVDA)
- Microsoft (NASDAQ:MSFT)
- Fastly (NYSE:FSLY)
- Qualcomm (NASDAQ:QCOM)
Metaverse Stocks: Meta Platforms (FB)
Mark Zuckerberg has decided to rebrand Facebook to reflect the company’s focus on virtual reality and the metaverse. Meta Platforms promised $10 billion for metaverse development and recently got many patents related to biometric data technology from users in the VR world. This could lead to a breakthrough in what we know today as the metaverse.
Meta is working on two major virtual reality fronts: the metaverse and an external gaming platform. This platform houses the company’s subsidiaries, Oculus and Horizon. It plans to make money through advertising revenue streams and commercialization of its metaverse.
The last few weeks have been tough for Meta. The company was in over its head, facing a series of stories in The Wall Street Journal about misstep after misstep. It was even forced to deal with a whistleblower.
Facebook’s recent problems are even more problematic because of lowered usage from teens. And then, in early October, Facebook experienced an outage, which was very expensive.
Consequently, the metaverse announcement is a much-needed boost for the company. Considering how valuable it can become, the former Facebook will do well to continue increasing exposure to this space.
Additionally, FB stock is trading at reasonable price multiple for the first time in a while. At the time of writing, shares of the social media giant are trading at 16.8 times forward price-to-earnings (forward P/E). Therefore, it is one of the best metaverse stocks out there.
Unity Software (U)
Unity is a flexible, easy-to-use 3D video game engine that can be customize to meet any designer’s needs. This allows businesses from various industries to access this world and create new experiences for its customers.
The company recently purchase Oscar-winning Weta Digital, a special effects business. It highlighted how the company gives users similar powers to those achieved by director Peter Jackson with artificial intelligence in The Lord Of The Rings.
Unity reported a fourth-quarter loss of $162 million, or 56 cents per share, compared to the year-ago period when it saw a loss of $83 million. The adjusted loss was 5 cents. In the comparison period, this figure was 10 cents per share.
Revenue jumped to $315.9 million from $220.3 million last year. Unity’s income for the year is up to $1.11 billion from $772 million last time around.
Unity believes the transition from 2D to 3D presents an opportunity for growth. “These are strong tailwinds that help us drive growth for years to come,” Unity Chief Executive John Riccitiello said.
Unity has been predicting a revenue of $315 million to $320 million and $1.49 billion to $1.51 billion for the next year.
Metaverse Stocks: Roblox (RBLX)
Roblox has established itself as a successful gaming platform because of its unique and creative approach to development. Roblox lets users create worlds and play them online as part of the first major company to launch a public platform for this purpose.
Roblox emulates the worldbuilding of games such as Epic Games’ Fortnite and Microsoft’s Minecraft — both of which have already established themselves as huge successes on their own. The game lets players use currencies to purchase many items in the game, like clothes or houses. Roblox also has deals with several big brands, such as Nike (NYSE:NKE) and the National Football League (NFL).
In the fourth quarter, Roblox missed expectations on both its top and bottom lines. But on the bright side, the company saw 49.5 million daily active users in Q4, a 33% increase from last year.
The number of people playing video games has declined over the past few months, which is an interesting observation. Roblox was popular last year. But there are some concerns that as people go back to school or work, they will likely spend less time on the platform. Therefore, you need to put the numbers into context.
In the long run, this platform wants to ensure it will stay relevant to teens by providing opportunities to learn game development skills no matter their age. Considering the secular growth in gaming, it is no surprise this is one of the stronger metaverse stocks out there.
Autodesk is an industry-leading computer-aided design (CAD) software architect used to design buildings and goods from one central location. But don’t stop there — this product has been around since 1982, and it has grown tremendously in the process.
More than 100 million people are using the software to unleash their creativity. The company focuses on developing flexible enough products for people from all walks of life, from architects and engineers to students and hobbyists.
The use of construction and engineering software means the design landscape is not only for architects, but also businesses across a wide range of industries. These versatile tools unlock creativity and allow us to solve many challenges.
Architects and engineers use Autodesk software to build virtual models and create virtual reality experiences. They use its programs like Revit, which is specifically designed for building information modeling.
A large portion of Autodesk’s business comes from building software that helps designers design buildings. It has a variety of products for architects and engineers, including tools used to create digital 3D animations, VR and AR experiences.
ADSK is an interesting stock to analyze. Over the last three months, shares have been down 32.9%. However, despite the steep fall, the company is still trading at 35.8 times forward P/E. Nevertheless, its unique proposition means it is in a league of its own, and one of the best metaverse stocks out there.
Metaverse Stocks: Nvidia (NVDA)
Nvidia is a company that was founded in 1993 and is headquartered in Santa Clara, California. It designs graphics processing units (GPUs) to power high-end gaming computers. Nvidia’s processors are widely used in PCs, workstations, servers and mobile devices.
Nvidia also provides professional-grade GPU computing platforms for data centers, high-performance computing (HPC) clusters and supercomputers. Since its inception, Nvidia has been one of the world’s leaders in visual computing.
The company is a leading supplier of Artificial Intelligence (AI) tools. Companies have used them to develop self-driving cars, facial recognition and voice recognition software.
Nvidia’s hardware is used for computing servers, supercomputers and AI. It’s pretty common for AI and VR experts to use its processors in their work. In the future, VR and AR will need a lot of processing power, so Nvidia chips will play a crucial role.
Nvidia CEO Jensen Huang said this technology could save time and resources by simulating factories, plants and power grids before they’re built in real space. Considering NVDA’s importance for this field, it is one of the best metaverse stocks out there.
Microsoft is an excellent investment that has been on the rise since its IPO in 1986. It has had positive growth in the past few years, and it continues to grow because of its innovative products and services. The tech giant has great financials and can be considered one of the best investments in the market.
In a move that will surely make video game enthusiasts everywhere cheer, Microsoft is acquiring world-renowned Call of Duty developer Activision Blizzard (NASDAQ:ATVI). This $70 billion acquisition should positively impact Microsoft stockholders and is likely to turn up future profits.
Since this deal is new, there are still a lot of unknowns. But it’s something to keep an eye on as more information comes in. However, the framing of the agreement is interesting. Microsoft announced a major acquisition that it says will give the company an edge in the ever-changing metaverse.
Microsoft Teams and Zoom (NASDAQ:ZM) are already forms of a Metaverse, in the sense that you can be present for a meeting in real-time but represented by a static image on your screen. The global pandemic forced workers to abandon their offices and learn how to work remotely. Therefore, Microsoft is working extensively on its Teams offering, and the metaverse is a natural transition for the company.
Microsoft has been able to adapt to changing times and maintain its position as a leader in the technology industry. With investments in AI, cloud computing and mixed reality, it is confidently moving forward into the future. The investment in the metaverse is just one more step in the right direction.
Metaverse Stocks: Fastly (FSLY)
Fastly is one of the fastest-growing content delivery networks (CDNs) in the world. The company provides excellent results for its customers, with strong financials and robust fundamentals. The company has grown rapidly in recent years and will continue to do so in the future.
Fastly stock saw a huge increase in November when its latest results were announced. It raised $87 million in revenue for the quarter, a 23% increase from last year. The company is also on track to exceed the forecasts of Wall Street analysts. On a non-GAAP basis, the company lost 11 cents per share, narrower than the Street consensus for a loss of 19 cents per share.
Fastly’s enterprise customer count grew from 408 to 430, while its total customer count jumped to 2,581. As per CEO Joshua Bixby, the company is very pleased its customers have returned to its platform after an eventful outage in Q2. He says the company has resolved all issues, and top users have returned:
“I am pleased to report that our top customers have returned traffic and continue to ramp following significant stability and resilience work by our infrastructure and engineering teams.”
Fastly is forecasting a top line of approximately $90 to 93 million for the December quarter and a loss between 16 and 19 cents per share. The Street consensus is for revenue of approximately $91.9 million and a loss of 15 cents per share.
Qualcomm is a global semiconductor company. It is the world’s largest maker of mobile phone chips. The company has a major market share, and it has been able to maintain its lead by being the first to introduce new technology in the mobile phone market. The smartphone industry has widely used Qualcomm’s Snapdragon processors for years.
Qualcomm’s Cristiano Amon is bullish on the company’s prospects. “If you are going to spend time in the Metaverse, Snapdragon is going to be your ticket,” said Amon, talking about Qualcomm’s mobile application processor and modem platform.
The company is an industry leader, and with its position, it has a great opportunity to further its reach through the metaverse. Such technologies are critical to making the concept a reality; another company can’t replicate themes.
Oculus Quest 2 uses a Snapdragon XR2 mobile processor, which has sold 10 million units. It’s the first major consumer device that runs on Snapdragon, and it’s designed to usher in a new age of gaming. VR and AR has swept the gaming industry, and both provide a more immersive experience — especially when paired with fixed foveated rendering or other major features like camera support.
This article originally appeared at InvestorPlace.
On the publication date, Faizan Farooque did not hold (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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence.