The metaverse has been one of the hottest topics in the tech world over the past year as it promises to be a turning point for humanity. With companies like Meta (formerly known as Facebook), Nvidia, Epic Games, and Microsoft racing to create it, investors have really started paying attention to metaverse stock. If you are one of them, we have compiled a list of metaverse stocks you might want to invest in.
What Is the Metaverse?
The concept of Metaverse is nothing new despite its recent appearance in pop culture. In fact, the word “Metaverse” has been around since 1992 when it was introduced in a science-fiction novel by the title of “Snow Crash”. Written by American author Neal Stephenson, the novel depicts the metaverse as the successor of the internet which operates as a virtual world that users can access via portable terminals.
Stephenson’s metaverse was bound to the laws of physics just like in real life, with users even having to walk or use monorails to commute in the virtual world. However, the concept of metaverse has evolved to represent a virtual world in which users can live a second digital life. Unfortunately, the definition of what this actually entails is non-existent as everyone seems to have their own idea of the requirements.
Despite the lack of clarity on what actually constitutes a Metaverse, you probably are already familiar with the idea. If you have watched movies like “Tron”, “Ready Player One”, or “The Matrix”, you have seen what the metaverse represents. You probably also have heard or even played games that could arguably be considered a metaverse in itself, as is the case of “Second Life”.
What is important for you to keep in mind is that the idea of the metaverse is still changing and evolving. This fact is important as when investing in a metaverse stock, you are investing in the company’s vision for the metaverse, not the metaverse itself… as there is no such thing.
Why Should You Care About the Metaverse?
We understand if our previous explanation of the Metaverse and the examples we mentioned made you underestimate the potential of the metaverse. While it is true that most iterations of the metaverse depicted in movies and existing platforms are game-like, there is so much more to it. As a digital world means to offer the chance of a “second life”, a metaverse should also offer a wide range of services that extend beyond gaming.
Massive Multiplayer Online Roleplaying Games (MMORPG) like World of Warcraft have been around for years, offering players a virtual world to roam freely. This makes gamers closely familiar with the concept of metaverse but not necessarily users until this point. What would set a virtual world like WOW apart from the Metaverse is its range of functions.
The idea of the concept being pursued by the big companies at this time includes complex economic systems that open the doors to monetization through commerce, advertisements, virtual real estate, virtual jobs, and much more. As such, the metaverse creates a virtual world that mirrors the real world, instead of being a world with pure entertainment value.
As the metaverse is basically the real world taken into the digital realm, independently of the form, the possibilities are endless. Imagine the chance of creating virtual businesses, items, organizations, and anything else in a virtual environment populated by millions of people from all around the world.
By merging the internet and real life, the metaverse promises a new way to live. It is not a surprise that Grayscale estimates the metaverse is a $1 trillion revenue opportunity for the advertising, social commerce, and tech industries. Even if you choose not to invest in the Metaverse, it will play an important role in shaping your and our future.
This potential the metaverse represents to reshape the digital realm was some of the biggest companies heavily investing in its development. Let’s take a look at 8 metaverse stock you should consider investing in!
What Companies Will Benefit the Most From the Metaverse’s Success?
With the Metaverse representing such a great financial opportunity, it is not a surprise that some of the biggest companies in the world are taking part in its development. For example, Microsoft’s recent acquisition of Activision Blizzard, one of the biggest gaming companies in the world, for $68.7 billion was motivated by the Metaverse. This makes the company one of the latest tech giants to join the race.
Several tech companies have already been working on the metaverse directly or indirectly for a while. These are the companies we will focus on for this list while taking a look at their journey into the metaverse so far. No, with no particular order in mind, let’s take a look at the top metaverse stock you should consider investing in!
Nvidia
Nvidia is widely known as the leader in the Graphics Processing Unit (GPU) market ever since its founding back in 1993. However, despite its prominent role in the industry, it has been expanding into other fields over the past years. The favorite of millions of gamers and power users around the world, Nvidia is now working on Artificial Intelligence (AI), data science, cloud computing, self-driving vehicles, computing, and more.
Nvidia’s stock grew in value by more than 125% during 2021 as a result of the increasing demand for GPUs and data centers. The company reported record revenue of $7.1 billion for the third quarter of 2021, which represented an increase of 50% from the revenue it generated over the previous year.
GPU and data center demand is still on the rise as the transition to remote work continues to take place for millions of people and businesses move to operate online. However, the company also has an important role to play in the development of the metaverse due to its relevance in the AR and VR spaces.
Jensen Huang, Nvidia’s CEO, has also proven to be one of the most vocal supporters of the metaverse, having talked about it for years. Back in April of 2021, Huang delivered a keynote on the topic of the omniverse, a company’s version of the metaverse specially designed for engineers. Ever since the announcement, the project has continued to gain relevance among the engineering community as the company keeps prioritizing its development.
With metaverse platforms being likely to require high specs for the processing of graphics, Nvidia’s 83% share of the GPU market will allow the company to benefit from the metaverse craze.
The great thing about investing in Nvidia metaverse stock is that you are investing in diverse applications of its technology which are poised for growth. In addition to this, its approach to the metaverse (omniverse) is unique in nature, which means that any competitor would be at a disadvantage.
Coinbase
Let us be clear: Coinbase is not working on any metaverse project that we know of at this time. However, this doesn’t mean that the company has nothing to gain from the success of the metaverse.
As you probably know, Coinbase is one of the biggest cryptocurrency exchanges out there. As one of the only exchanges operating in the United States, the exchange has grown exponentially over the past years. In fact, it became the first major exchange to go public back on April 14 of 2021.
Blockchain technology is being used by several projects on the development of decentralized metaverses. Names like Decentraland, Axie Infinity, and The Sandbox have been making headlines over the past months, with all of them making use of blockchain and crypto to run their virtual economies.
As one of the biggest cryptocurrency exchanges out there, Coinbase will surely be one of the go-to platforms for the trading of cryptocurrencies powering future decentralized metaverses. If you believe that decentralized metaverses will be able to go mainstream, this is certainly a metaverse stock to add to your portfolio.
Unity
Unity is one of the most important names in the gaming industry. The game development platform has become one of the most popular game engines with more than 1.5 million monthly creators. The engine has grown so big that many consider it to be a strong competitor to Epic Games.
Despite not having the best year in 2021, Unity’s metaverse stock has seen its value increase by over 9.92% over the past 6 months. The company also reported revenue of over $286 million during the third quarter of 2021, an increase of over 43% when compared to the past year.
With Unity powering many of the most popular mobile and desktop game titles, as well as other platforms, the metaverse explosion could get its total addressable market even higher. The company is not planning on taking a leading but a “support” role in metaverse development, as Unity’s senior VP of revenue Julie Shumaker told Forbes back in December.
Despite not being actively working on the creation of its own metaverse, Unity is committed to making the transition to the metaverse easier. The company envisions the metaverse as a transition space that connects multiple games and ecosystems together through accessible doors.
In line with this idea, the company has launched its work toward making connectivity between games easier through features like Unity Gaming Services. However, for the company to play a real supporting role, it would need to introduce new features that allowed creators to include such “lobbies” that would host players moving between spaces.
For now, Unity’s potential to benefit from the metaverse craze is related to the relevance it has as a game engine. If this is not enough for you to seriously consider it, just know that Unity’s CEO John Riccitiello seems committed to having the company play an essential role. Back in November of 2021, he stated “We’re the underlying toolset for creating the metaverse”.
Epic Games
Epic Games is the company behind Unreal Engine, one of the biggest game engines out there. While Unity has the biggest market share in the mobile game market, Unreal has managed to be a worthy competitor while completely dominating the PC and console markets.
Fortnite, an online game with more than 350 million players, is another popular product in Epic Games’ belt. Despite having been around for years, the game has continued to be one of the most popular titles by keeping the game fresh via unique partnerships and updates. This has made the game transcend its original nature to become an internet phenomenon and even work as a social network of sorts.
Epic Games is betting on Fortnite to grow until it achieves metaverse status, a process that has taken place organically over the years. The already huge user base of the game also provides the company with a competitive advantage.
Tim Sweeney, Epic Games CEO and founder, is known to be one of the most enthusiastic executives when it comes to the metaverse. Last year, he referred to the importance of the metaverse and the race to build it by stating:
“Over the coming decades, the metaverse has the potential to become a multi-trillion-dollar part of the world economy. The next three years are going to be critical for all of the metaverse-aspiring companies like Epic, Roblox, Microsoft, Facebook,” he said in an interview after. “It’s kind of a race to get to a billion users, whoever brings on a billion users first, would be the presumed leader in setting the standards.”
Back in April of last year, Epic closed a $1 billion funding round launched “to Support Epic’s Long-Term Vision for the Metaverse”. This vision includes the connection of many of Epic’s most popular titles, which include Fortnite, Rocket League, and Fall Guys, as well as facilitating interaction between titles built with Unreal Engine.
Meta
This is a metaverse stock that couldn’t miss in this list! While the metaverse has been in the mouth of millions of people over the past year, the company that helped it popularize the most was Meta. Formerly known as Facebook, the company founded by Mark Zuckerberg rebranded itself to make its commitment to the development of the metaverse clear for everyone.
Ever since the rebranding, Meta has redoubled its efforts to develop the metaverse, investing over $10 billion on its metaverse unit during 2021. This investment allowed the company to create a working prototype that is currently in beta (Horizon Worlds), which is why the company is planning to invest more over the next few years.
Patent applications submitted by Facebook to the US Patent and Trademark Office show that Meta’s metaverse will be heavily focused on virtual stores. These would allow users to acquire digital and real-world goods, as part of a commerce-led business model.
As one of the biggest tech companies in the world, Meta is not sparing in expanses when it comes to winning the race. The company is working on technology that would allow for the creation of hyper-realistic avatars that could be able to replicate poses, facial expressions, and more.
While Facebook’s public perception has grown increasingly negative over the past years, the company is making efforts to change this. For this reason and its approach, many experts see Meta as one of the safest bets on the Metaverse. Just like Epic Games, Meta already counts with a huge user base it can easily incentivize to adopt its vision of the metaverse.
AMD/INTEL
Back in December of last year, Intel recognized the important role the metaverse will play in the future of computing. However, the company believes that computing capabilities need to increase by “several orders of magnitude” in order to make the metaverse a reality. This is where both AMD and Intel come in.
AMD and Intel are the Coca-Cola and Pepsi of the CPU world. These companies power most of the devices people would use to access the metaverse, which is why they stand to benefit from the success of the metaverse.
While GPUs have been the go-to solution for gamers for decades, the short supply over the past years has forced CPU manufacturers to improve their discrete graphics chip market. This, in combination with the additional computing power needed by upcoming platforms, would result in developers prioritizing CPU optimization for the metaverse.
The demand for CPUs in the metaverse will not be limited to end-users but will also include the companies developing it. Back in November, Meta announced that it would be using AMD’s Epyc chips in its data centers, many of which will power its metaverse.
Betting on AMD or Intel’s metaverse stock is investing in the infrastructure that will support the metaverse, no matter if decentralized or centralized models succeed. Investing in AMD or Intel is a matter of which approach you believe more in.
Amazon
Just like with our previous entry, Amazon is also a metaverse stock you might want to consider if you are thinking about investing in the infrastructure behind the metaverse. As the company behind Amazon Web Services (AWS), Amazon has the biggest share in the cloud computing market and has a lot to benefit from when the metaverse gets off the ground.
In addition to this, Amazon will also benefit from the commerce opportunities that the metaverse will create. With an online model that has already proven to be incredibly successful, not only would the company be able to offer its services in the Metaverse but also expand its services. For example, Amazon could link real-life goods with virtual ones, as well as offer virtual goods like real estate, 3d models, services, and more.
It is also important to note that while the Metaverse is not exclusively focused on gaming, this will surely play an important role in it. This, in combination with its social nature, will also have a profound impact on the streaming industry. With Amazon also being the company behind Twitch, this trend would also prove extremely beneficial to the e-commerce titan.
Amazon has not disclosed any plans to play an active role in the development of the metaverse yet. However, we believe that the reasons we already listed are more than enough to consider investing in and treating Amazon stock as a metaverse stock.
Tencent
The Chinese internet giant is one of the most influential companies in the social media and gaming industries in the world, and certainly the biggest in China. This places the company in a unique position to capitalize on the increasing interest and cultural relevance of the Metaverse.
This week, it was announced that Tencent would be acquiring Xiami’s BlackShark gaming division. BlackShark is a company that manufactures gaming phones and accessories but will be changing its focus to AR/VR hardware after the acquisition. With this move, Tencent will further expand its capabilities and synergy with metaverse development as this could be the building block it was missing.
Back in 2021, Tencent revealed its vision for the Metaverse in an earnings call when CEO Pony Ma said:
“The way we look at Metaverse in terms of sort of — at a high level is that we feel that anything that really makes the virtual world more real and making the real world richer with virtual experiences can actually sort of becoming part of the Metaverse big world. And as a result, we felt it’s going to be an opportunity that really adds growth to the existing industries. For example, it will be an addition to the gaming industry.”
Tencent is also the second-largest stakeholder for Epic Games, which certainly opens the doors to interesting collaborations. With other Chinese companies like Baidu joining the metaverse race, it is just natural for Tencent to follow through now that it has acquired the last piece in the puzzle.
