Metaverse Pioneers: 3 Stocks Leading the Next Digital Frontier
Metaverse stocks offer investment opportunities as they redefine internet engagement. Meta Platforms, Roblox, and Microsoft are key players to consider.
The metaverse, despite its controversial nature, continues to hold immense potential for investors. These companies are revolutionizing our interaction with the internet, and the metaverse may already be a reality in our lives. From cryptocurrencies to NFTs to virtual concert tickets, the metaverse plays an increasingly important role.
Now is an opportune time to invest in metaverse stocks, as many of these companies are trading below their intrinsic values. If you're looking to accumulate shares in these companies, now is the time to do so.
One of the top metaverse stocks to consider is Meta Platforms (NASDAQ:META). This company is at the forefront of the metaverse trend and generates most of its revenue from ads on Facebook and Instagram. However, its Reality Labs segment focuses on hardware devices and VR content, with its Oculus VR headsets gaining popularity in the market.
Meta engages a staggering 38% of the global population daily and holds a lucrative second place in the global digital ad market. Despite substantial investments in the metaverse and AI, Meta's forward P/E ratio of 19x remains attractive compared to its major tech peers. While slightly overvalued according to Morningstar's fair value estimate, Meta is still a buy due to its comparably undervalued position.
Another metaverse stock worth considering is Roblox (NASDAQ:RBLX). This virtual world platform can be seen as an early-stage version of a metaverse platform. It has evolved from a platform primarily for young users in the U.S. to a global platform with a broader user base, hosting live events featuring celebrities and musicians.
Although RBLX's stock has experienced a decline due to slowing revenue growth and increased operating expenses, there are potential catalysts for growth. The introduction of Roblox Connect aims to enhance user engagement by offering more immersive social interactions and monetization opportunities. Additionally, the availability of Roblox on Playstation four and five expands the ecosystem further, with the goal of reaching 1 billion users.
Despite a 25% decline in its stock value year-to-date, RBLX presents a buying opportunity for investors. With shares trading at just 7.8x its sales, well below the stock's average, it is considered one of the metaverse stocks that can be acquired at a bargain.
Microsoft (NASDAQ:MSFT), primarily known for its software products, also has valuable capabilities in artificial intelligence that can contribute to metaverse development. Its partnership with leading AI company OpenAI and its powerful cloud-computing product Azure are noteworthy.
Microsoft has key initiatives in place to strengthen its presence in the metaverse. The acquisition of Activision Blizzard signifies a strategic move toward the metaverse, particularly in business communications and gaming. CEO Satya Nadella emphasizes the development of metaverse applications across various domains, integrated on a common platform like Microsoft Mesh.
With its increasing prominence in the metaverse, MSFT offers investors an extra reason to consider buying the stock today.