The Metaverse is the next big thing to disrupt our daily lives because it allows individuals to imagine a future in which our physical presence will no longer be required, including at work. Meetings and discussions will take place in a virtual world where avatars, which are graphical representations of users, will be able to interact with one another from comfort of their own homes. Similarly, as Metaverse platforms improve, remote working, which has become popular in the last two years, will become more effective.
The next ten years will be critical for both businesses and individuals as the digital sector modernizes how people interact and conduct business. Digitalization is profoundly changing every aspect of our lives, from simple entertainment to complex business transactions. Virtual Reality headsets are also continuously pushing the innovation curve further. According to the CompareBroker research note, IDC predicts the VR growth rate will increase by 41.4%. They forecasted 7.15 million headsets for this year. There are rumors that next year we are likely to see a VR head from Apple. Facebook, now known as Meta, has been in VR space since 2014.
Moreover, the coronavirus pandemic has expedited this transition by demonstrating to the world the power of digitalization and how nearly every aspect of our lives can be conducted effectively and efficiently remotely.
What is all this hype about Metaverse?
Investors should understand that we are eventually moving toward a future in which people do not need to be physically present in offices to earn a living, and activities that require physical force will eventually be performed by robots. To realize this vision, companies such as Microsoft and Meta, Facebook's parent company, are actively developing technologies that will assist businesses in ultimately converting this vision into reality.
The experience of using the Metaverse to conduct discussions and meetings will most likely be so lifelike or organic that people may no longer want to travel to have in-person meetings. Individuals will save money on expenses associated with such travel, from airfare to hotel and lodging and even eating out. The most significant benefit of this technology will be the amount of time saved, which can be put to better use.
One of the main goal of the Metaverse is to make remote working seem less remote, and provide users with a more intimate experience that rivals that of physically being in a room. However, we are still in the beginning phases of this revolution, which is why investors should consider gaining exposure to companies associated with the Metaverse in order to achieve attractive returns while stocks are cheap. If you want to get in on the action, the following ten companies are a good place to start:
| Stocks to Watch | |
|---|---|
| 1. | Nvidia |
| 2. | Roblox |
| 3. | Microsoft |
| 4. | Meta Platforms |
| 5. | Unity Software |
| 6. | Apple |
| 7. | Amazon |
| 8. | Qualcomm |
| 9. | Autodesk |
| 10. | Tencent Holdings |
If investors want to be a little more tactical, they could look closely at Nvidia, Roblox, and Microsoft in particular, which show signs of having a relatively more focused and comprehensive approach, as well as adequate resources, to make operating in the virtual world a reality in the coming years.
Nvidia (NVDA)
Nvidia is an excellent choice for entering the Metaverse because it provides a critical component without which the Metaverse applications cannot function: Graphics processing units (GPUs). The Metaverse will potentially boost the company's sales and, as a result, have a positive impact on profit margins, which will eventually benefit stockholders in the form of dividends and a rise in the company's share price. In addition to providing the Metaverse with the necessary hardware, the company is also in the process of developing software known as the Omniverse platform, which is aimed at sharing, development, and productivity services that are specifically designed to contribute to providing individuals with Metaverse experiences. This has the potential to be a significant driver of future growth for the company.
Roblox (RBLX)
Roblox is also a good option for investors considering investing in the Metaverse universe because the company takes a different approach than other companies that are developing their own services and hardware for use in the Metaverse sector. What Roblox is doing is giving businesses the option of creating their own virtual experience that is tailored to their specific needs. This is an area where the company can potentially gain a competitive advantage and become a market leader.
To understand its business model, imagine it as a company with a framework similar to YouTube, where third parties upload their own videos and are paid based on the traffic that the videos receive. Similarly, Roblox allows users to create their own games, and they are compensated when users play them or spend money on services related to the game. However, investors should keep in mind that Roblox is primarily used by children, and the potential lies in the company's management's ability to effectively pivot its focus to the Metaverse.
Microsoft (MSFT)
Microsoft is already a household name, and the company is showing strong interest in the Metaverse in order to prepare for the next stage of technological evolution. The world's second largest company by market capitalization is working tirelessly to improve its cloud and business productivity services, which will be aligned with the Metaverse and cater to a variety of use cases. The company is working on two interesting services: a mixed reality platform called "Microsoft Mesh" and cloud services called "Microsoft Azure."
Mesh will almost certainly enable Microsoft to give people the option of virtually collaborating with one another while working remotely and away from the office. This service is currently being integrated with the company's Microsoft Teams platform, which allows users to interact with one another during trainings, meetings, and networking events by using avatars. With the growing popularity of hybrid working cultures, in which employees work from home some days and from the office on others, Microsoft's Mesh service could be tailored to a wide range of use cases in the coming years. Similarly, the company's Azure service is intended to provide individuals with the tools necessary to create digital simulations of real-world objects. Individuals could use this software to drive cost-effective planning and innovation.
The Bottom Line
Investors should note that if it weren't for technology companies like Zoom, Google, and Microsoft, the world would have come to a standstill during the pandemic, with people unable to carry out their daily responsibilities in a world where close proximity to other people became lethal. We were able to survive and mitigate the effects of the pandemic thanks to digital innovations such as video conferencing, email, and cloud-based sharing services. This is why advancements in platforms like the Metaverse are absolutely essential for businesses looking to maximize productivity in the future. There is no better time than now to enter the Metaverse arena because we are still in the early stages of the process.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Naeem Aslam
I am a former Hedge Fund Trader with over 15 years of experience in investment banking. During my early career, I was awarded a national award (Young Irish Broker) in 2010. Over the years, I have worked with Bank of America in equity trading and with Bank of New York in hedge fund trading. I specialize in Blockchain technologies (cryptocurrencies and digital assets) and Sustainable Investments. In my career thus far, I have also extensively covered Equities, Commodities and Forex.
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