The Metaverse is a shared virtual 3D world, or worlds, that are interactive and collaborative. It is facilitated by the use of virtual and augmented reality. The concept became extremely popular in 2021 particularly since Facebook rebranded itself as Meta Platforms.
With more and more companies from various industries joining the Meta bandwagon, it is clear that Metaverse will dictate the next generation of internet sooner or later. It offers a significant investment opportunity in the coming years.
Bloomberg Intelligence expects the market opportunity for the metaverse to reach $800 billion by 2024 from $500 billion in 2020, based on its analysis and Newzoo, IDC, PWC, Statista and Two Circles data. The primary market for online game makers and gaming hardware may top $400 billion in 2024 while the remaining business will come from live entertainment and social media. Gaming, AR, VR create $413 billion primary market of Metaverse, per Bloomberg.
Per an article published on grandviewresearch.com, the global metaverse market size was estimated at $38.85 billion in 2021. It is expected to increase at a compound annual growth rate (CAGR) of 39.4% from 2022 to 2030. According to industry experts, the metaverse is expected to permeate a host of industries in several ways in the coming years, with the potential market opportunity or the total addressable market estimated at more than $1 trillion in yearly revenues.
Against this backdrop, below we highlight a few stocks and ETFs those are gearing up to capitalize on the metaverse boom. These stocks are all not pure-play tech stocks. So, investors who fear rising rate worries being a drag on the tech investing right now, may like those other industry plays.
Stocks in Focus
Unity Software (U – Free Report)
Zacks Rank #3 (Hold) Unity Software provides platform for creating and operating interactive, real-time 3D content. The company platform provides set of software solutions to create, run and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles and augmented and virtual reality devices. Analysts expect 19.31% revenue growth in 2022 and 26.51% top-line growth in 2023.
Walmart (WMT – Free Report)
Retail giant Walmart is entering the metaverse with two experiences, Walmart Land and Walmart’s Universe of Play, in gaming platform Roblox. The retailer is experimenting with other ways to reach shoppers, including shoppable recipes, livestreaming events and an augmented reality feature for furniture, per a CNBC article. Zacks Rank #3 Walmart appears to be venturing into the metaverse with plans to create its own cryptocurrency and collection of NFTs, per a CNBC article.
Apple (AAPL – Free Report)
Though Zacks Rank #3 (Hold) Apple is not quite into Metaverse, investors can bet on Apple’s augmented-reality ambitions.
ETFs in Focus
Roundhill Ball Metaverse ETF (METV – Free Report)
The underlying Ball Metaverse Index seeks to track the performance of globally-listed equity securities of companies that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues. META charges 59 bps in fees.
Amplify Transformational Data Sharing ETF (BLOK – Free Report)
Since blockchain is the basic technology of Metaverse, BLOK is sure to gain. The Amplify Transformational Data Sharing ETF is an actively managed ETF that seeks to provide total return by investing at least 80% of its net assets in the equity securities of companies actively involved in the development and utilization of transformational data sharing technologies. The ETF BLOK charges 71 bps in fees.
Global X Data Center REITs & Digital Infrastructure ETF (VPN – Free Report)
Metaverse’s reliance on data centres makes the ETF VPN a lucrative bet. The boom in Metaverse will eventually upgrade the digital infrastructure incredibly. The underlying Solactive Data Center REITs & Digital Infrastructure Index seeks to provide exposure to companies that have business operations in the fields of data centers, cellular towers and digital infrastructure hardware. VPN charges 50 bps in fees.
