3 Metaverse stocks to buy now

Neil Stevenson coined the term “metaverse” in his novel Snowfall Three decades ago, but it has re-emerged as a buzzword over the past year as virtual reality, augmented reality and digital asset platforms have blended barriers between the physical and digital world.

This global inverse market could grow at a compound annual growth rate (CAGR) of 39.1% between 2022 and 2030, according to Ocean Report. However, there is a lot of hype and hype in this booming market, and it can be difficult for investors to separate the losers from the potential winners.

Image source: Getty Images.

Today, I’m going to go over three promising metaverse stocks – platforms (FB 3.86%)And Unity Program (WL 11.43%)And Roblox (RBLX 15.36%) – and explain why they can still make attractive investments in this challenging environment for high-growth technology stocks.

1. Metaplatforms

Last October, Facebook rebranded itself as Meta Platforms to show its long-term focus on the metaverse market. This strategy is rooted in the Reality Labs segment, which generated $2.3 billion in revenue in 2021 primarily selling VR headsets, VR software, and smart glasses.

The Reality Labs segment took in just 2% of Meta revenue and made $10.2 billion in operating losses last year, but it’s growing. Meta is said to ship around 10 million Quest 2 headsets in 2021, and the Horizon Worlds VR Stadium reached 300,000 users earlier this year. It also requires carving out approximately 50% of the total sales of virtual assets on this platform.

The metaverse is still negligible compared to the 3.64 billion people who access at least one of the apps (Facebook, Messenger, Instagram, WhatsApp) every month. It will also likely continue to burn money as Meta focuses on selling cheap headphones to attract more users.

But in the long run, Horizon Worlds may continue to grow as the Meta releases more devices and metaverse experiences. This shift could reduce the company’s reliance on targeted advertising.

Meta stock has already lost about a third of its value this year and is trading at only 16x forward earnings. This low valuation reflects near-term challenges to her advertising business, but investors confident of her view of metaverses should consider hoarding the stock today.

2. Unit software

Shares of Unity Software have halved this year as investors retreat from more expensive growth stocks. The stock may look a little higher at 14x sales this year, but I think Unity is a strong reversal buy for three reasons.

First, the Unity game engine powers more than half of all mobile, console, and PC games in the world. Developers use Unity because it combines various tools for creating graphics, sound effects, in-app ads, and multiplayer features into one easy-to-use package. Games created with Unity can also be played on multiple game platforms without rewriting them.

Popular VR games including Meta beat the sword, Already working on Unity. Therefore, Unity should benefit from the long-term growth of the traditional game market as well as the expansion of the metaverse game market.

Second, unity has a clear vision of the future. It expects to generate more than 30% annual growth in “long-term” non-GAAP-equivalent revenue in 2023.

Finally, the company plans to develop its ecosystem outside the gaming market. It has already been used to develop non-game 3D graphics for virtual reality education and training, applications for self-driving and industrial automation technologies, and has recently entered the theatrical special effects market. By acquiring Weta Digital from Peter Jackson (who produced the special edition) traces of the Lord of the Rings And iron throne) last December.

All of these strengths can be said to justify Unity’s higher rating and make it a solid long-term investment in the growing metaverse market.

3- ROBLOX

Roblox has become a household name during the pandemic as millions of locked up kids have built, shared, and monetized simple games on its platform. Its popularity skyrocketed because its block-based system was easy to use, required no coding knowledge, and was a creator-focused platform like the alphabetYouTube that did not rely on professional developers.

Roblox’s growth has slowed in the post-lockdown market as more kids go back to school, but it’s still ending 2021 with 49.5 million daily active users (DAUs), which is 33% growth over last year. It also continues to acquire older users (over 13 years old) and expand abroad.

The popularity of Roblox has made it a fertile platform for major brands like nikeAnd keyringis Gucci and Sony Music sows its own seeds. Nike built a virtual showroom called Nikeland, Gucci launched rooms themed “Gucci Garden” to display its products, and Sony Music launched concerts for its artists. If other brands follow suit, the Roblox platform could evolve into a virtual shopping mall where users can spend their in-game currency.

Roblox stock has lost about two-thirds of its value this year as investors worry about slowing growth and mounting losses. But after that slump, it traded only seven times this year’s sales. If Roblox stabilizes its business and continues to gain more DAU and brand partners, its stock could bounce back and once again become the best metaverse game.

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