This article has been reviewed by Sumeet Sinha, MBA (Emory University Goizueta Business School). Should you have any inquiries, please do not hesitate to contact at firstname.lastname@example.org.
What is Metaverse?
Facebook (FB), the technology company we knew for so many years, changed its name to Meta in October 2021. The name change reflects the company’s commitment to bringing the metaverse (hence the new name META) to life. According to Mark Zuckerberg, the metaverse is the next frontier for social connections, and as a technology company with a mission to connect people, Meta (has been, and) will be investing heavily in this area. So, what is metaverse exactly?
Metaverse is a network of virtual worlds. It is a virtual three-dimensional world where people can get together and socialize and do things, even if the people live miles away from each other in the physical real world.
So, I and my friends from the United States, United Kingdom, India, and Canada can get together and have a conversation in a virtual office (or a restaurant, or a beach…) in the Metaverse. Sounds pretty cool, isn’t it? At least it’s much better than the bland Zoom video calls, where everyone is a two-dimensional talking image on a computer screen.
Interesting Fact: The term ‘Metaverse’ was first used in the 1992 fiction novel “Snow Crash” by Neal Stephenson
Watch Meta(Facebook)’s Presentation on Metaverse Below
6 Good Metaverse Stocks To Buy: The MFAANG Stocks
Are all MFAANG Companies Investing in Metaverse?
How can we have a conversation about technology and not talk about the MFAANG stocks? Let’s see how each of these 6 stocks can play a role in the metaverse. Later in the article, we will also look at some more metaverse stocks.
MSFT – Microsoft
Microsoft already owns Minecraft, which is a virtual world in itself. Microsoft recently announced the takeover of Activision Blizzard (the digital game company that launched games such as Call of Duty). It is a move to obtain a dominant position in the metaverse economy. Microsoft CEO, Satya Nadella, said that he expects gaming to play a key role in the development of the metaverse, and the (almost) $70 Billion Bid to buy Activision Blizzard, shows Microsoft’s commitment to leading the metaverse revolution.
META (earlier FB) – Facebook or Meta (the Ultimate Metaverse Stock?)
Facebook CEO Mark Zuckerberg has previously said that his company (now renamed META) has been working on the concept of Metaverse for more than 7 years already. The company’s acquisition of Oculus, the Virtual Reality headset maker, in the year 2014 was a strategic one, keeping the vision of Metaverse in mind. With the company’s rename and rebrand to Meta, the commitment to Metaverse is crystal clear.
AAPL – Apple
Apple has made no public announcements regarding their products that can be considered ‘metaverse’ specific, yet. However, the iPhones keep getting new sensors that can make the device more spatially aware. It won’t be a surprise if Apple is already testing out hardware secretly and they also reveal their headset or similar product that could take the user to the metaverse. Apple likes its products to be consumer-ready (and of high quality) before they make any public announcements. It would be exciting to see what they come up with!
AMZN – Amazon
Whether or not Amazon will come up with their own hardware for the metaverse is still unclear. However, Amazon’s cloud infrastructure could play a key role in supporting the storage, networking, and computing requirements of the metaverse players. For example, Facebook (Meta) uses Amazon’s AWS cloud computing solutions! Directly or indirectly, Amazon will be a player in the metaverse. It would be exciting to see if Amazon comes up with their own hardware (they have built Echo and Fire devices before, so who knows!).
NFLX – Netflix
Among the MFAANG companies, Netflix could be one that people might not consider a dominant player in the metaverse. However, before we discount Netflix, here’s what we need to consider – Netflix currently offers a few games to its subscribers. This might be a small pilot project for their bet on something bigger in the metaverse. Even though all news about metaverse seems to be from a gaming perspective, Netflix could very well come up with an interactive video entertainment solution in the metaverse. They have also hired an executive from Facebook (Meta) Oculus team, so who knows what Netflix has planned for the metaverse!
GOOG – Google or Alphabet
Google (Alphabet) seems to be working on everything in the world of technology – smartphone to smart cars to smart devices – literally everything. The company has been working on smart glasses for quite some time. Their Google Glass is still used in the industry, but it is not available to regular consumers in the retail market. We are not sure if the smart glasses will be the portal to Google’s metaverse, or will they also be coming up with a headset-like device, but Google won’t want to be left far behind, especially with their dominance on the internet and mobile platform.
Why Does Metaverse Matter?
Metaverse can provide some value to almost all users, based on their needs. It can be useful to corporate enterprises, globally distributed teams, educators, students, and just about anyone else for learning, gaming, and entertainment purposes.
Metaverse for Work
It appears that the Metaverse will promote creative and new ways for team members to collaborate on projects and attend meetings & workshops. We have heard multiple discussions online and in the media that the post-covid work-life will be a hybrid one – partially from home, partially in the office. However, with the creation and subsequent adoption of the metaverse, the new work-life could turn into a hybrid between a physical world office and a virtual world office.
Personally, I love brainstorming ideas with my teams on a whiteboard. With Covid related restrictions, the in-person white-boarding sessions have become rare to none. Of course, there are online collaboration tools where you can get the job done, but getting together in metaverse and white-boarding sounds super interesting to me.
Another important consideration is the fatigue that the employees may face. Immersive experiences are great, but will they cause burnouts at a much faster rate? We will have to see!
Metaverse for Education
If work meetings can be held in the metaverse, course lectures can be organized in the metaverse as well. Classes that are delivered via Zoom video calls, can be made more immersive in the metaverse. Laboratory experiments (physics and chemistry) might be difficult to replicate in the metaverse – but some solutions could be thought about them also.
Universities with huge disposable funds could become pioneers of delivering their courses in the metaverse. If there is sufficient demand, the cost of doing so will also come down with scale as more and more universities join in. It would be interesting to see how many students would be willing to do a full 4-year bachelor’s degree in the metaverse.
Metaverse for Gaming and Entertainment
Many games let users create an avatar of themselves to play and complete missions in a virtual world. Metaverse will take gaming to the next level by making the experience even more immersive. Many experts, including Mark Zuckerberg, have mentioned that it would be possible to carry a rendition of a physical object in the real world into the metaverse – that would be cool. How it plays out – that’s yet to be seen. As Microsoft CEO Satya Nadella has said, Gaming will probably be at the forefront of the metaverse revolution.
Is Metaverse the Future?
The future of metaverse looks bright. With more and more companies jumping on the trend, metaverse could soon be the ‘new internet’. There are several companies that have been developing their metaverse tech for a while now and they have already started to launch some products and services. Whilst it is still early days for metaverse, many tech experts believe that metaverse could be as big as the internet or maybe even bigger.
Metaverse could be more popular than social media sites like Facebook, Twitter, and Instagram because of the ability to immerse people in one place where they can interact with other community users. They would also be more efficient because social media sites are just simply flat, whereas metaverse has the potential to provide a more realistic experience.
Metaverse will not only change the way that we live our lives, but it will also change the way that people communicate with each other online. So it could be better for people’s mental health as well.
Metaverse also provides social opportunities that weren’t possible on the internet due to the lack of immersion. Now, you can do things like touch objects, walk around and interact with other people in your metaverse world. Imagine what metaverse could be like ten years from now! They may even be used in classrooms to teach children about the world, or for education.
Examples of Metaverse
High Fidelity Metaverse
One of the metaverses currently available is High Fidelity’s virtual world, where users can create their own avatar and live an alternate life in a virtual world which provides the same flexibility as the real world. Whilst this metaverse requires high processing power to work effectively, it could be said that metaverses are the future of virtual reality.
Second Life Metaverse
Apart from High Fidelity, another metaverse that is also well worth mentioning is Second Life because it’s been around for quite a long time now and it has managed to build up a community of metaverse users who are passionate about the technology. With the recent investment from High Fidelity to scale Second Life, there might be interesting developments in the future.
Created in 2018 by Pixowl, Sandbox is a virtual world where users can customize their gaming experience. Sandbox is built on the Ethereum blockchain.
Users can buy plots of land in the Decentraland metaverse, build on top of it, rent it out (maybe?) and make money from these virtual ‘real’ estate and assets. Decentraland is also built on the Ethereum blockchain.
Somnium Space Metaverse
Somnium Space, a competitor to Decentraland, is a Virtual Reality world-builder platform for virtual ‘real’ estate ownership and trading. The currency used for transactions in the Somnium world is a Somnium Cube
IMVU is a large 3D social network. In IMVU, users can interact and do other activities via their avatars (the digital rendition of the user in metaverse). Users can also create some virtual products and earn money! The IMVU platform has over 7 million users already.
How to Invest in Metaverse?
Okay, so by now we know a few things about this promising new technology and understand the hype behind it. What steps can we take to take advantage of this upcoming trend? Is there a way to invest to benefit from the metaverse? Let’s see our options to invest in the metaverse technology. While there are options to invest in the metaverse by buying and selling NFTs, and virtual plots of land and other virtual assets, they appear to be too speculative in nature. Here, in this article, we will focus on some good Metaverse stocks to buy or keep on your watchlist for the metaverse play.
12 Good Metaverse Stocks To Buy
The metaverse is a virtual world, but there are real companies writing code in the real-world to make all of this happen. The companies that will create software or hardware for the metaverse are set to benefit from the adoption of the technology. We have already talked about the role of 6 MFAANG stocks in the metaverse above. So, let’s take a look at 12 other stocks that can benefit from the metaverse.
Metaverse Stock: Cloudflare (NET)
As an edge computing provider, Cloudflare could be considered a Metaverse Stock. Edge computing will be a vital part of supporting the metaverse, thanks to its ability to improve data reliability and security. The network characteristics that come with edge-based systems make it an important player for any kind of application on this platform; because they allow developers who work within these fields greater access than ever before possible, while also improving their own product’s performance by eliminating potential bottlenecks along the route between client-side processing power versus server farms where information is centralized but stored locally – reducing response times significantly when compared against traditional models.
Metaverse Stock: Fastly (FSLY)
Similar to Cloudflare, Fastly is another strong contender set to make gains from the metaverse by providing Content Delivery Network and Edge Computing services.
Metaverse Stock: Roblox (RBLX)
Roblox can be a key player in delivering amazing experiences in the metaverse. For example, Paris Hilton’s 2021 New Year’s Eve party was a virtual event hosted on Roblox. The guests in her virtual party flew private jets around the virtual island ‘Paris World’, shopped at boutique stores, and enjoyed lounging by the poolside. The event illustrates how Roblox technology can be used not just for gaming but also in creating 3D experiences that go beyond what is possible on other platforms.
Metaverse Stock: Take-Two Interactive (TTWO)
Gaming Industry popular brands like Grand Theft Auto, NBA 2K, and Red Dead Redemption are the brainchild of this game publisher. Take-Two Interactive could be well-positioned to play an important part on the metaverse gaming experience front.
Metaverse Stock: NVIDIA (NVDA)
The company’s graphics and video processing chips are a crucial part of powering AI, high-end computing as well as the Metaverse. Nvidia has been a popular stock among gaming industry investors already, and with the adoption of the metaverse, this stock could very well continue to grow further.
Metaverse Stock: Unity Software (U)
In the world of video games, Unity is a key player. It is a globally popular platform for developing 3D content in real-time and helps build varied applications within industries such as gaming; it could serve this purpose even more by helping build our metaverse! With metaverse’s projected annual growth rate of 45% over the next few years, we can expect Unity to become a prime candidate on the list of any investor who wishes for success through investing in the metaverse.
Metaverse Stock: Digital Realty Trust (DLR)
With over 280 data centers in 50 metropolitan areas on six continents, this company has the global market covered. They are able to succeed by providing high-quality services at a competitive price. This data center specialist company can be a major player in the metaverse race. They get their revenue from monthly rental fees, utility reimbursement services to power these facilities, as well as interconnection agreements between each location’s network infrastructure which allows them to provide better service overall.
Metaverse Stock: Matterport (MTTR)
Earlier in the article, we have talked about taking a physical object from this real-world into the metaverse, Matterport can help us with that. This company takes physical assets and renders a digital version of them, so Matterport should be on a metaverse investor’s watchlist.
Metaverse Stock: Qualcomm Incorporated (QCOM)
As you might already know, QUALCOMM designs semiconductors that are used in gadgets such as phones, notebooks, and Internet of Things (IoT) devices. Qualcomm plans to be a key player by powering hardware devices that allow users to access the metaverse. The Oculus Quest 2 hardware devices already run on Qualcomm’s semiconductor chipsets.
Metaverse Stock: Autodesk, Inc. (ADSK)
Autodesk builds simulation software for creating three-dimensional products. Its software is already popular in the engineering and construction industries, among others. The ability to make software for creating highly detailed products puts Autodesk as a player in the metaverse race.
Metaverse Stock: Tencent Holdings Limited (TCEHY)
Tencent owns Epic Games, developer of the popular game Fortnite. In the future, Epic could create virtual worlds for hosting events, social gatherings, and even concerts in the metaverse. With an already active user base, Epic might find some participants in their virtual world easily.
Metaverse Stock: Adobe (ADBE)
Adobe is the globally renowned creator of Photoshop, Acrobat, and other products. The company also owns a product called Aero which can be used for developing augmented reality (AR) experiences. It won’t come as a surprise if Adobe starts focusing more on providing solutions for creating and building in the metaverse.
Read also: Which is The ETF for Metaverse?
Read also: How To Buy Land In The Metaverse
Metaverse ETF: Invest in Metaverse via an ETF
The Roundhill Ball Metaverse ETF (META) offers investors exposure to the Metaverse. METV ETF tracks the performance of the Ball Metaverse Index (“META Index”). The Ball Metaverse Index consists of a portfolio of global companies actively involved in the Metaverse. Investors can also consider investing in the METV ETF instead of individually picking and investing in metaverse stocks. The downside of investing in METV ETF is the 0.75% expense ratio (i.e. for every $10,000 invested in this ETF will cost you $75 in fund management fees per year).
METAVERSE ETF (METV) is not to be confused with Meta (Facebook’s parent) Company (META)
Create Your Own Metaverse ETF Pie
You can create your own Metaverse ETF equivalent by creating pies on apps such as M1 Finance (US) and Trading212 (Europe). You can add stocks as slices, and adjust weights to create your own Metaverse Pie.
Investors in the United States can create a Metaverse Pie on M1 Finance. You can add slices of the stocks you want in there and adjust their weights. Check out offers on M1 Finance for new users.
Investors in Europe can create a Metaverse Pie on Trading212. You can add slices of the stocks you want in there and adjust their weights. You can get a FREE stock of up to $100 for getting started on Trading212.
Disclosure: Among the stocks mentioned in this article, we have investments in DLR, MTTR, U, NVDA, NET, FSLY, RBLX, MSFT, FB, AAPL, AMZN, NFLX, GOOG, ETH, ATVI.
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