What Is The Metaverse & Why Are Investors Excited?
There’s nothing buzzier than the metaverse in the stock market today. The metaverse, for those unfamiliar, is the concept of an always present virtual reality (VR) where users can meet virtually to play games, communicate and even collaborate on work projects. For many years, the virtual reality space has long been part of sci-fi novels and movies. And thanks to advancement in VR technology and computing power, that fiction is slowly becoming reality.
Earlier this year, we saw Facebook changing its name to Meta Platforms. The social media giant announced that it will invest around $10 billion annually in pursuing this new ecosystem. That has undoubtedly sent a shockwave through the technology industry. While the metaverse could enable human beings to live a richer social life from the comfort of their home, not all share the same sentiment. In fact, some critics have expressed skepticism and concern, as the metaverse could compromise privacy and exacerbate addiction to social media.
Let’s face it, the metaverse is still in its infancy and there is still a lot of work that needs to be done. However, if you believe the metaverse is like the internet in the 1990s, would you take a chance on this space right now? Assuming you’re interested but do not want to spend the time to identify potential winners, you could spread your bets out. The idea of investing in exchange-traded funds (ETFs) like Roundhill Ball Metaverse ETF (NYSEARCA: META) could be attractive. Alternatively, if you’re only interested in purchasing specific stocks, here are five metaverse stocks in the stock market right now.
Top Metaverse Stocks To Watch In 2022
- Roblox Corp. (NYSE: RBLX)
- Meta Platforms Inc. (NASDAQ: FB)
- Nvidia Corporation (NASDAQ: NVDA)
- Unity Software Inc. (NYSE: U)
- Matterport Inc. (NASDAQ: MTTR)
Online entertainment platform Roblox empowers people to play video games and socialize in a vast 3D, virtual world. Since the company’s debut on the public market last year, RBLX stock has generated a lot of buzz on Wall Street. After all, Roblox is an online entertainment platform that may be the closest thing to an existing social metaverse today. Through its “human co-experience platform”, millions of players worldwide interact with each other in a variety of ways. This ranges from user-built interactive games to pop culture-related content and even live streamable music events in-game.
Just yesterday, Forever 21 launched an exclusive partnership with Virtual Brand Group, a metaverse creation company. This partnership allows users to buy and sell Forever 21 merchandise and customize their own stores on the Roblox video game platform. For the record, this is not the first time a fashion brand launches on Roblox. Prior to this, Ralph Lauren (NYSE: RL) and Nike (NYSE: NKE) had already partnered with Roblox to advertise and engage with their users. With all these in mind, could RBLX stock be an addition to your watchlist?
Meta Platforms, as mentioned above, is now focusing heavily on building and expanding the metaverse. It aims to do so while still making the most of its flagship social media platforms, Facebook, Instagram, and WhatsApp. Now, the company boasts social media expertise and cutting-edge augmented reality (AR) and virtual reality (VR) hardware. When you consider how all these components give it an edge over the competition, Meta could be a force to be reckoned with.
Certainly, the company’s social media business is doing well. But it’s no secret that user growth has been lackluster over the past few years, especially among teens. And that could be one reason to prompt the company to announce an aggressive investment into building the metaverse. Earlier this week, Instagram said it is “actively exploring” how to bring non-fungible tokens (NFTs) to a wider audience. While these assets are popular modern-day collectibles, they could play a bigger role in representing ownership in a virtual world. With FB stock trading sideways in recent months, could this be a good buying opportunity?
Semiconductor giant NVIDIA could be one of the big winners in the metaverse. To power the virtual reality apps in the metaverse, companies will need powerful graphic chips to make the virtual world a reality. And that’s where NVIDIA fits in perfectly. The metaverse should present a tremendous long-term growth opportunity market for Nvidia.
What’s more, Nvidia’s Omniverse is already gaining momentum. For starters, it is a subscription product, which will result in a predictive revenue stream for the years to come. It has a wide range of enterprise applications, ranging from design collaboration, simulation of real-world architecture to tools for training robots. With such a growth runway ahead, would NVDA stock make your list of top metaverse stocks to buy today?
Unity Software is the world’s leading platform for creating and operating interactive, real-time 3D content. With the acquisition of Weta Digital, Unity seems to be well-positioned to capture new revenue streams in the metaverse. That’s because Unity would be able to put Weta’s leading visual effects tools into the hands of millions of creators and artists around the world. This move is important, considering that artists will account for a major chunk of people creating the metaverse.
More importantly, Weta’s tools could help Unity expand beyond its dominant position in gaming. Such acquisition will allow the target new verticals such as NFTs, film production or e-commerce. And when you combine all these capabilities, it could expand Unity’s total addressable market. While NFTs are still highly speculative, it is crucial for Unity to tap into this space. Given all this, would you include U stock on your watchlist before 2022?
Matterport is a platform for spatial data, enabling companies to digitize any type of space. The company specializes in digital twins, which refers to a digital copy of a real-world place or object. In other words, Matterport dabbles in VR and this technology can be used in creating the metaverse. The company is right now in the process of signing up as many of the major residential brokerages and commercial real estate brokerages as they can.
For instance, Matterport announced that commercial real estate firm Cushman & Wakefield (NYSE: CWK) has successfully adopted Matterport Capture Services to digitize its global property portfolio. The solution allows Cushman & Wakefield agents to scan properties and create dimensionally accurate and photorealistic digital twins. With that, potential buyers and tenants can now have the additional convenience of viewing properties virtually. Nevertheless, given the many use cases for its AR/VR spatial data technology and the metaverse, would you be buying MTTR stock?
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