With the recent surge in interest in virtual reality and other immersive technologies, it’s no surprise that investors are looking to get in on the action. One area that has seen a lot of excitement lately is metaverse stocks. The revolutionary new phenomenon can revolutionize how we interact with one another in the digital age, which makes it imperative for investors to wager in some of the no-brainer metaverse stocks.
The sector is still in its nascency and poised for incredible long-term growth. Fortune Business Insights forecasts that the burgeoning sector could potentially experience 48% growth each year through 2029, making it one of the most lucrative investment areas. Businesses in the sector are involved in diverse areas such as social media, gaming, cloud, and others. The seven metaverse stocks discussed in the article are arguably the best ways to play the latest technological trend.
Global X Metaverse ETF
The metaverse will require a ton of physical hardware to develop virtual environments, and Nvidia’s (NASDAQ:NVDA) graphics processing units (GPUs) are fast becoming the go-to options for investors. It designs and develops cutting-edge GPUs that are likely to play a pivotal role in developing the novel concept. Hence, it’s the pick of the metaverse facilitators that will benefit from the success of whichever business thrives in the sector.
Nvidia boasts a robust legacy business that enables tech giants to continue investing in new growth verticals. Last year, it released a content creation platform called the Omniverse, which enables designers, engineers, and creators to share their material in the digital realm effectively. The platform is gaining strong traction among users and is likely to grow at an incredible pace for the foreseeable future.
Match Group (MTCH)
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Match Group (NASDAQ:MTCH) is a market leader in the online dating space, with over a 60% market share. It boasts a huge portfolio of assets in the sector, and its incumbent position gives it incredible scalability. Moreover, the firm generates a sizeable 28% of its sales as free cash flows.
Match turned heads last year after announcing its plans to develop a dating metaverse and the development of a virtual economy. In addressing the changing dynamics of online dating, its flagship dating app, Tinder, forayed into virtual experiences instead of pushing individuals for offline connections. That led to the launch of Tinder Explore and plans for a virtual goods-based economy. Due to the recent market challenges, Match has scaled back investments in the metaverse but is poised to become a massive player in the niche over the long run.
Unity Software (U)
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Unity Software (NYSE:U) is a leader in the video game engine market, commanding over 60% share in the space. Its popular tools bundle together graphical design, sound, monetization, and other related assets in its easy-to-use platform. It operates an incredibly robust business, boasting double-digit growth across both lines over the past several years. Therefore Unity is a great pick for investors.
Unity’s 3D tools are tailor-made for virtual reality (or VR) and augmented reality (or AR) applications. Long-term forecasts for Unity’s software suite are positive, with the rapid growth in VR and AR expected to generate robust growth for the business. Moreover, investments in its cloud capabilities and transition towards a recurring sales model bode well for Unity over the long run.
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As a tech leader, Microsoft (NASDAQ:MSFT) is always looking for new ways to engage and connect with its customers. With the recent launch of its Mesh software, it has made its presence felt in the metaverse space, marrying two of its most exciting software services in Teams and Mesh.
Mesh is a unique platform that allows users to meet each other virtually and collaborate interactively. Combined with Microsoft Teams, which continues to be one of the company’s most popular real-time teamwork and communication platforms, Mesh will surely transform how businesses operate today. Moreover, the company is developing the user technology needed to maximize the experience with its HoloLens AR glasses.
Also, you have its Xbox Gaming consoles that can effectively deliver virtual experiences through VR goggles. Therefore, MSFT stock will become a major player in the metaverse space with an incredible growth runway ahead.
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Autodesk (NASDAQ:ADSK) is a top software tool provider for construction and engineering markets. Its popular building information modeling (BIM) program, Revit, allows users to visualize designs easily. Moreover, the designs can be taken to a whole new level via plugins, including Autodesk Rendering, for developing VR and AR animations.
Its operating performance has been stellar over the years, with its business boasting rock-solid margins over the past five years. With it being a 100% software-as-a-service provider, its business offers rock-solid gross margins over the 90% mark. It has established itself as the go-to construction software, a sector poised to grow 8.5% through 2030.
Global X Metaverse ETF (VR)
Investing in an exchange-traded fund like Global X Metaverse ETF (NASDAQ:VR) can be a smart move for anyone looking to get in on the growing metaverse trend. The fund offers exposure to some of the biggest names in VR and AR.
This includes companies such as Snap Inc. (NYSE:SNAP), Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and many others. With its wide range of holdings and relatively low-risk level, investing in a VR/AR ETF can be one of the best ways to play the metaverse trend at a low cost. Unlike stocks that can go up or down rapidly based on market fluctuations and other external factors, ETFs tend to be much more stable over time. Furthermore, the ETF comes with a remarkably low expense ratio of roughly 0.5%, below the sector average of 0.45%. Therefore, there’s plenty to like about VR stock over the long run.
Chipmaker Intel (NASDAQ:INTC) is well-positioned to power the metaverse of the future with its powerful processors and innovative technologies. Intel sees great potential in the emerging metaverse, predicting that it will become an essential part of our daily lives in the coming years.
However, despite this optimism, Intel also recognizes that we are still far away from metaverse experiences. Many technical challenges must be overcome before we can fully realize the dream of living in a virtual world. Nevertheless, with its deep expertise and cutting-edge technology, Intel will likely play an integral role in making the metaverse a reality.
In a recently released editorial on the company website, the firm’s senior vice president Raja Koduri talked about how a 1,000-fold increase in computing power will be needed before we can realize the true potential of the metaverse. In executing its plans, Intel is going all-in on chip-making with an eye on dominating the metaverse.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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