Do you know why the best metaverse stocks need to be on your investment radar? Beause the metaverse is poised to disrupt the internet. By this point, most people have heard the excitement around the metaverse. However, they’re still a little bit shaky on what exactly the metaverse is. This is because, technically speaking, the metaverse doesn’t exist yet. The metaverse will be an immersive, embodied internet that enhances your digital experiences.
The metaverse will combine many different technologies to create an enhanced internet experience. A few of the technologies that it will use are augmented/virtual reality, cryptocurrency, NFTs, and digital worlds all built on top of the existing internet. Right now, people are not quite sure what it will look like. However, it will be a digital world, or worlds, that people enter via virtual reality.
As you can imagine, this new digital world will have just as many money-making opportunities for companies as the real world does. In fact, it might even have more. Here are just a handful of ways that companies could make money off the metaverse:
- Creating hardware that powers the metaverse: processing chips, VR headsets, etc.
- Creating software that powers the metaverse
- Advertising in digital worlds where consumers are hanging out
- Investing in digital real estate
- Hosting digital events: concerts, meetings, expos, etc
- Selling digital products or apparel to consumers and their avatars
For many companies, the metaverse presents an enormous opportunity to add new revenue streams. Some companies are even pivoting their entire business towards the metaverse. Accordingly, the metaverse will create a substantial opportunity for investors to realize outsized returns by investing in metaverse stocks through their online broker. With that said, let’s take a look at what the best metaverse stocks for 2022 are.
Meta Platforms (FB)
There are few companies taking the metaverse more seriously than Meta Platforms, formerly Facebook. Meta Platform’s main business segments are Facebook, Instagram, WhatsApp, and Oculus VR. In Q4 2021, it made a big statement by breaking its financial reporting into two segments: Family of Apps and Reality Labs. This is the first time that Meta will report on its virtual reality business separately. This announcement came after Facebook rebranded its entire business to Meta Platforms.
In 2022, Meta has committed to investing $10 billion into creating the metaverse. However, this money will mainly go to funding the following products:
- Oculus VR– Virtual reality headsets
- Project Nazare – Virtual reality glasses
- Horizon – Virtual reality world-building experiences
As a company, Meta Platforms is at an incredibly interesting turning point. For the first time in 17 years, it reported declining user growth on a global scale. At the same time, it is facing a litany of lawsuits from many different parties. People criticize it for influencing political elections, damaging users’ mental health, and misusing user data.
However, Meta Platforms is also uniquely positioned to profit from the metaverse revolution. If it’s successful, then it has an opportunity to make more money than ever before. This is mainly due to the asset that it controls:
- Facebook – The world’s biggest community that has ever been created. It reaches over 2 billion users.
- Instagram – 1 billion users.
- WhatsApp – 2 billion users.
- Oculus VR – Meta’s virtual reality headset is already one of the industry leaders.
- Tens of billions of dollars in income – Meta posted a whopping $46.75 billion in operating income in 2021. This is more than enough money to hire the best developers, acquire competing businesses, and turn the metaverse into a reality.
Only time will tell if Meta’s bet on the metaverse makes it one of the best metaverse stocks for 2022.
After Meta Platforms, Microsoft is one of the best metaverse stocks to own for 2022. Similar to Meta, Microsoft has gobs of money to throw at ambitious projects like the metaverse. To be specific, it earned $69.92 billion in operating income in 2021. The biggest difference between Meta and Microsoft is that Microsoft is much more diversified. It also hasn’t gone all-in on the metaverse the way Meta has.
Microsoft owns dozens of assets that give it an edge over competing metaverse companies. To name a few:
- Gaming – Many consumers’ first experience with the metaverse will most likely be through video games. After its acquisition of Activision Blizzard, Microsoft is now one of the world’s biggest video game companies. It controls Activison’s portfolio of games which includes Call of Duty, Crash Bandicoot, and Candy Crush.
- Xbox – Microsoft also owns Xbox, which is another major asset in the gaming world.
- HoloLens – Microsoft’s VR headset is one of the industry leaders, along with Facebook’s Oculus.
- Cloud computing – Microsoft owns Azure, which is the second-largest cloud computing service after Amazon’s AWS. Azure will surely play a big role in providing the computing power necessary to build the metaverse.
- Microsoft Office Suite – The metaverse has big implications for the business world. Due to this, Microsoft’s incredibly popular office suite could play a huge role.
There are so many different reasons that Microsoft is one of the top metaverse stocks. In fact, each of the bullet points above merits its own article. Whenever the metaverse comes to fruition, it’s a safe bet that Microsoft will be a part of it.
Microsoft bought Roblox. Many companies are rushing to create digital worlds. Roblox is one of these companies. If you’re not familiar, Roblox is kind of an open-source world-building gaming company. It allows developers to build virtual worlds/games that other users can play.
So far, Roblox has been one of the most successful companies when it comes to building digital worlds. Here are a few of the main takeaways from its business;
- 9.5 million developers
- 24 million experiences
- $760 million paid to developers
- 73 billion cumulative user hours engaged
Up until now, Roblox has mainly been geared towards younger generations. However, as the metaverse enters the mainstream, it has rapidly become more popular.
Unity Software (U)
Unity Software is a real-time development platform. Its software allows developers to create immersive real-time 3D content. As you can imagine, this software has surged in popularity now that so many companies are focused on building the metaverse. There are two main reasons that Unity Software is uniquely positioned as a metaverse stock:
- Its software can be used on over 25 platforms – If you are a developer, you can create a program once on Unity’s platform. Then, you can deploy it across iOS, Android, Xbox, PlayStation, HoloLens, and many more platforms. This is an incredible time-saver for developers.
- It’s not just games – Unity stresses that it creates 3D content, not just games. Its real-time 3D solutions have applications in the automotive industry, aerospace, engineering, animation, and many others.
Many investors are looking at Unity Software as one of the companies that will be crucial to building the foundation of the metaverse.
Autodesk is one of the leaders in 3D design, engineering, and entertainment software. It creates solutions for a wide range of industries including architecture, construction, manufacturing, media, and education. Similar to Unity, Autodesk’s software could play a huge role in creating the metaverse. However, Autodesk’s solutions are geared towards building more efficient buildings, infrastructure, and other industrial solutions.
One interesting thing to note about Autodesk is that it boasted a 97% customer retention in FY 2021. At the same time, it still considers itself a growth company and forecasts double-digit revenue growth for the next 3 years. This means that almost all of its customers are renewing their subscriptions each year. At the same time, it is constantly adding new customers.
If more companies start to use Autodesk’s solutions to build virtual worlds then it could most definitely become one of the top metaverse stocks.
Take-Two Interactive (TTWO)
As mentioned, gaming is expected to play a huge role in the metaverse. Most consumers’ first metaverse experience will likely be through a game. Due to this, Take-Two Interactive is definitely a contender for one of the 10 best metaverse stocks for 2022.
Take-Two is one of the world’s largest video game publishers. It is best known for its gaming franchises Grand Theft Auto, Borderlands, Red Dead, and 2K Sports. It delivers these games through just about every single outlet. For example, its games can be played on consoles, personal computers, smartphones, and tablets. You can also purchase them at a physical store, download them online, or stream them from cloud services.
Take-Two will most likely be a second-stage metaverse company. It will not play a crucial role in building the metaverse. However, it will most likely adapt its games to be playable in the metaverse. This could be a huge driver of sales for existing games. Take-Two could also develop new games that are designed specifically for the metaverse.
Electronic Arts (EA)
Electronic Arts is in a very similar position to Take-Two. It is one of the largest video game companies in the world. In 2020, it posted revenue of $5.5 billion. This puts it ahead of Take-Two Interactive but after Activision Blizzard (now Microsoft). Electronic Arts’ most popular franchises include Apex Legends, Battlefield, and Star Wars Battlefront.
Similar to other gaming companies on this list, Electronic Arts is in a great position to create metaverse-friendly versions of its games. Doing this could allow it to boost sales and become one of the best metaverse stocks for 2022.
Matterport is one of the world’s leading spatial data companies. This means that it helps businesses create virtual copies of real-world spaces. If you’ve ever taken a virtual tour of an apartment or house then you’re familiar with Matterport’s style of technology.
The metaverse relies on creating digital worlds. The only problem is that creating digital worlds is time-intensive, costly, and difficult. Matterport solves this by allowing companies to create virtual copies of real-world locations. This could be a room, building, or outdoor location. For example, Matterport could help you create a digital representation of your living room. If you are a developer, this is a massive help. It’s similar to the invention of cameras, which eliminated the need to draw everything by hand.
Next, we have another of the best metaverse stocks for 2022. This is because Adobe dominates creative design software. You’re most likely familiar with Adobe Photoshop, InDesign, and Illustrator. However, Abode is also launching Creative Cloud Spaces and Creative Cloud Canvas. These are collaborative products that will allow creators to organize and display their projects with others. The main goal for launching these products is to make it easier for people to collaborate with each other online.
The potential for creative digital design within the metaverse is massive. The metaverse is entirely manmade, which means that everything you see had to be created by someone. Adobe’s tools could play a huge role in helping today’s creators design the metaverse of tomorrow.
Roundhill Ball Metaverse ETF (METV)
With a trend like the metaverse, the best option might not be to try and pick a winning stock. However, a safer strategy is investing in an exchange-traded fund (ETF). An ETF gives you exposure to a number of different companies instead of just one. For example, the Roundhill Ball Metaverse ETF owns shares in about 50 different companies. All of these companies have some exposure to the metaverse. Its 3 biggest holdings are Nvidia, Microsoft, and Meta Platforms.
This way, you’ll have exposure to most of the winning metaverse stocks, regardless of which ones end up becoming winners.
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