The Metaverse is a shared virtual 3D world, or worlds, that are interactive and collaborative. It encompasses a range of technologies in the field of collaborative spatial computing. Those technologies include interactive 3D graphics, augmented reality (“AR”), virtual reality (“VR”), online economies, multi-user gaming and more.
Once viewed as science fiction, the metaverse is now viewed as the future of gaming, entertainment, brands, e-commerce and enterprises. Any device capable of rendering an immersive 3-dimensional experience (including a PC or even an iPhone) is considered to be metaverse capable. With more and more companies from various industries joining the Meta bandwagon, it is clear that Metaverse will dictate the next generation of the Internet sooner or later as it offers a significant investment opportunity in the coming years. The global metaverse market size is expected to grow from $61.8 billion in 2022 to reach $426.9 billion by 2027, at a Compound Annual Growth Rate (“CAGR”) of 47.2% during the forecast period, per MarketandMarkets report. The primary market for online game makers and gaming hardware may top $400 billion in 2024, while the remaining business will come from live entertainment and social media. Gaming, AR and VR create a $413 billion primary market of Metaverse, per a Bloomberg Intelligence report. Hosted by the Khronos Group, the Metaverse Standards Forum has been created with the aim to establish interoperability standards for the predicted metaverse. Participants in the Metaverse Standards Forum include many of the biggest companies working in the space, from chip makers to gaming companies, as well as established standards-setting bodies like the World Wide Web Consortium (W3C). Companies considered metaverse stocks include Facebook parent Meta Platforms ( META Quick Quote META - Free Report) , Microsoft ( MSFT Quick Quote MSFT - Free Report) , Nvidia ( NVDA Quick Quote NVDA - Free Report) and Qualcomm ( QCOM Quick Quote QCOM - Free Report) . Other companies on board as founding members include Adobe, Alibaba, Autodesk, Epic Games, Ikea, Unity Software, Sony and Wayfair. Stocks to Watch with Recent Metaverse Developments
Here we discuss four stocks that are well poised to benefit from the metaverse boom.
Qualcomm believes in taking an open platform approach and interoperable metaverse as a metaverse enabler and provider of key technology to the ecosystem. In March, this Zacks Rank #2 (Buy) company announced the launch of the Snapdragon Metaverse Fund, which will enable and foster innovation across the entire ecosystem through venture investment and developer ecosystem grants for content projects. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The fund will invest up to $100 million in developers and companies building unique, immersive XR experiences, as well as associated core AR and related artificial intelligence (AI) technologies. NVIDIA’s strong lineup of advanced graphics cards has made it a favorite graphics card provider and is expected to help the company enter the gaming world in the metaverse. This Zacks Rank #3 (Hold) company’s Omniverse is also noteworthy in this regard. Powered by its RTX technology, Omniverse provides a shared platform on which live collaborations take place between users and applications with real-time speed and simulated reality. NVIDIA is seeking to turn its leading position in supplying the computing hardware for the metaverse into a set of software tools for creating and selling content within virtual worlds. Once artists create three-dimensional content that can be used in virtual worlds, they can sell that content on several marketplaces and content libraries. The company has reached deals with four such marketplaces — TurboSquid by Shutterstock, CGTrader, Sketchfab and Twinbru — to allow their marketplace content to show up in Nvidia's Omniverse software suite.
While NVIDIA will provide the computing power,
Microsoft aims to become the go-to-work software provider in the metaverse. This Zacks Rank #3 company’s Mesh for Microsoft Teams can be regarded as a gateway to the metaverse and used in a standard laptop or smartphone. The first step most users of Mesh for Teams will take is to join a standard Teams meeting as a customized avatar of themselves instead of as a static picture or on video. Organizations can also build immersive spaces – metaverses – within Teams. Microsoft acquired Activision Blizzard in an all-cash deal for $68.7 billion to competitively enter the world of gaming in the metaverse. Microsoft’s strategic plan to buy Activision has helped it become the third largest gaming company in the world and provided it with the expertise to claim its stake in the multimillion-dollar metaverse market.
Furthermore, Microsoft’s Xbox gaming system can be used to provide users access to the metaverse.
Meta Platform’s metaverse ambitions are well known. Mark Zuckerberg recently announced that the company will launch a digital clothing store called Meta Avatars Store, which will allow users to dress their avatars in the metaverse. Meta also said that it will be spending over $10 billion in the next 10 years on further building the metaverse. The company is also investing heavily to develop a VR content ecosystem. The launch of the VR headsets, Rift and Oculus Quest, its first all-in-one headsets with no wires and full freedom of movement, is a step toward this. Facebook’s experience building AR devices like Quest headset is expected to provide it a first- mover’s advantage in developing technologies essential for building the metaverse. This Zacks Rank #3 company is collaborating with VNTANA to bring 3D advertising to Facebook and Instagram in an effort to bring its advertising business to the metaverse.