The metaverse, a collective virtual shared space created by converging virtually enhanced physical reality and physically persistent virtual space, is rapidly changing the way people interact. This digital universe, comprising multiple interconnected environments and interactions, is poised to revolutionize entertainment, education, communication, and commerce.
With the global metaverse market projected to hit $1.5 trillion by 2029, growing at a CAGR of 47.6%, it’s an arena ripe for investment. For those keen on capitalizing on this burgeoning trend, here are three metaverse stocks to consider adding to your portfolio, especially during market dips.
1. Meta Platforms (META)
In 2021, Mark Zuckerberg rebranded Facebook to Meta Platforms (NASDAQ:META), signaling a strategic shift towards the metaverse. Today, Meta stands as a global social media titan, pioneering the modern metaverse vision. The company’s foray into virtual reality (VR) began years before this rebranding, with the acquisition of Oculus in 2014, a leading VR headset and content brand. Additionally, Meta’s portfolio includes Horizon, a VR platform for creating and exploring virtual worlds, and Facebook Reality Labs, focusing on augmented reality, haptics, and neural interfaces.
With over 3.8 billion monthly active users across its suite of apps, Meta’s vast user base offers a significant advantage in shaping the metaverse. Financially, Meta reported revenues of $116.5 billion in 2022, with a net income of $23.2 billion, translating to a 20% net margin. The company’s impressive Q1 2023 earnings further underscore its potential as a metaverse leader.
2. Roblox (RBLX)
Established in 2004, Roblox (NYSE:RBLX) has evolved from a mere computer game to a leading platform for user-generated content and social gaming, epitomizing the metaverse’s essence. Users can design, share, and play a plethora of 3D games and experiences across genres and devices. Roblox’s recent introduction of AI-powered developer tools further cements its position as a metaverse frontrunner.
Financially, Roblox reported a 16% YoY revenue growth in 2022, reaching $2.2 billion, with bookings rising by 5% to $2.8 billion. The stock has also witnessed a 46% surge year-to-date. The platform’s international growth presents additional avenues for expansion.
3. Nvidia (NVDA)
Nvidia (NASDAQ:NVDA), renowned for its high-performance graphics cards, is poised to be a pivotal player in the metaverse’s development. Beyond gaming, Nvidia’s GPUs and AI solutions are set to power the metaverse, offering high-quality rendering for 3D graphics, VR, and cloud gaming. Nvidia’s Omniverse, launched in 2022, empowers creators to design realistic 3D worlds, with collaborations like the one with Microsoft (NASDAQ:MSFT) further enhancing its metaverse offerings.
Nvidia’s dominant position in the GPU market, coupled with its dedicated base of gamers and developers, ensures its continued growth in the emerging metaverse landscape.
Final Thoughts:
The metaverse is more than just a buzzword; it’s the future of digital interaction. As it continues to evolve, the companies leading its development will likely offer significant returns for investors. Whether you’re a seasoned investor or just starting, these stocks present a golden opportunity to diversify your portfolio and tap into the next big thing in tech.
