5 Best Metaverse Stocks To Buy

It seems like the Internet is inexorably moving towards a virtual, online world that melds video, holographic avatars and Augmented Reality with the physical space we currently inhabit for work, leisure and relaxation.

As this vision becomes more tangible, we look here at which stocks are the most likely to profit from this technological revolution.

Nvidia 

Nvidia is well set to become one of the big winners from the imminent arrival of the metaverse in the next few years. The chip manufacturer has dominated the graphics processing unit (GPU) space of late, and that dominance is predicted to grow still more as the newest iteration of the Internet comes onboard.

In fact, the NVIDIA Corporation (NVDA) is somewhat ahead of the curve here; the company already has its own kind of metaverse in the form of its Omniverse platform, an extensible and scalable real-time reference development product used to enable creators, designer and engineers to collaborate in a shared 3-dimensional virtual space, bringing together design tools and other project assets into one, communal online place.

For the metaverse to become successful, the technology will need to live up to a number of challenges. Chief among these will be the ability to deliver convincing, superior graphics, as well as access to the processing power to render a believable virtual-physical world. It’s here that Nvidia’s near-monopoly on high-end, high-powered GPUs put it way ahead of the competition.

Indeed, during the Second Quarter 2021, NVIDIA’s share of the discrete GPU market space grew to 83%, while one its main rivals, AMD, took just 17%. If, and when, the demand for GPU’s explodes because of the metaverse, Nvidia stands to benefit from this bonanza the most.

Meta Platforms

Facebook dropped a bombshell earlier this year when it rebranded itself as Meta Platforms, Inc. (FB) and announced its focus would turn towards developing what it called the “metaverse”.

In some ways the decision shouldn’t have come as such a shock; the social media industry is maturing, and can not be expected to produce, or rely on, the same growth metrics it has done the last two decades. The space needs recreating, and that’s just what Facebook – sorry, Meta – intends to do.

As part of this re-imagining, Mark Zuckerberg, CEO of Meta, outlined plans to emphasize Augmented Reality and Virtual Reality as the priorities for the company going forward.

The business is far from being in trouble at the present time, however – FB’s Daily Active Users grew by 110 million during the period from the end of the Third Quarter 2020 – and its suite of offerings, including Facebook, Whats App and Instagram, are all showing solid results.

The company obviously feels it needs to do something new – and that’s exactly what investors should expect to see. Indeed, Meta has put aside around $10 billion this year to begin developing its metaverse strategy.

Much of what will come out of this might not be immediately successful – that’s just what happens when an enterprise starts off on a new innovative path. But FB is working from some solid ground already, with its Oculus VR headset providing one such launch pad to leverage for the future.

Matterport 

Virtual reality (VR) and the metaverse were made for one another, as the immersive nature of both technologies seeks to complement the respective capabilities of each.

One company poised to benefit from this coming together is Matterport, Inc. (MTTR), a specialist in the world of spatial data, 3D capture and digital twins. The market for these services is relatively new, but MTTR’s skill set in the augmented and virtual reality spheres makes it a perfect solution for what developers working in the metaverse will come to need.

Matterport is already in a partnership with Meta Platforms to begin building the latter’s version of its metaverse vision, and once Wall Street analysts made the connection between the two companies, MTTR’s share price shot up almost 50% at one point in the weeks following Facebook’s rebrand.

While the collaboration with Meta is exciting, there are even more reasons why Matterport could be a fantastic growth stock over the coming years.

The company is the market leader driving the digital transformation of the built environment, and has an unrivalled data platform in the space, with 10 years of R&D behind it and over 3 billion 3D data points under the hood.

The business also has a portfolio of blue chip companies as customers, as well as nearly half a million subscribers in roughly 170 countries.

Furthermore, the industry represents a huge, untapped total addressable market of $240 billion+: there are 20 billion spaces worldwide to be mapped, with less than 0.1% digital penetration.

At the moment, Matterport is still a speculative play in a sector that has yet to be fully realized. But if that vision of the metaverse becomes a reality, this stock could be one of the major growth stories of the coming decade.

Immersion 

Haptic technology developers have had real trouble breaking through to the popular imagination in recent times, but that could all be about to change with the dawning of the metaverse revolution. This is good news for touch feedback technology company Immersion Corporation (IMMR), a leading company in the field.

Haptic devices can be any technology that creates a felling of touch to the user, often using physical forces such as motion of vibration. It’s obvious how this added dimension of sensory feedback would enhance the experience of the metaverse, and that’s where Immersion comes in.

IMMR both develops and designs haptic devices, but also owns a large portfolio of over 3,200 patents. The company will play a big role when interest in haptic technology really takes off, and Immersion has lately inked deals with TITAN Haptics and Stanley Electric Co., Ltd. to bring its tech to a wider, bigger market.

Immersion stock is trading extremely cheap right now, having seen almost 50% of its share price wiped out so far this calendar year. And the business fundamentals for the company are good: over 90% of IMMR’s revenues are recurring, and its IP-based sales strategy is eminently scalable.

The firm also works with some big name brands, notably Sony (SONY) with its DualSense haptic controller, and enjoys some solid cash flows too – making the stock an investor’s dream, especially if it can ride the metaverse tailwinds when they come.

Microsoft 

Microsoft is building its own metaverse-type platform called Mesh, a collaboration and communications tool which looks to bring holographic technologies to its Microsoft Teams solution.

Not to be outdone by its other rivals in the space, the Microsoft Corporation (MSFT) is not that far from launching its Mesh product, which is slated to be some time next year.

Mesh will create immersive meeting spaces, mixing both 2D and 3D experiences. Interestingly, Meta Platforms and MSFT have announced a plan to integrate their Workspace and Teams platforms, making integration and interoperability between the two much easier.

This could entrench FB’s and Microsoft’s position in the metaverse market, providing a business moat that could make it much harder for competitors to get a foothold in the space in future.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.