There are some well-positioned companies that, thanks to their technologies, could ride the wave of the Metaverse and as a consequence their stocks could increase considerably on the stock market. Let's discover them together in detail in this chapter.
1) Facebook
Facebook is one of the main competitors in the virtual and augmented reality industry. The Oculus Quest 2 has been a huge commercial success, thanks to its low price and advanced features. Maybe you're already familiar with games like Beat Saber and Half-Life, just to name two examples of titles that are popular among Oculus visor owners.
Mark Zuckerberg's ambition in this area is extremely high. Meta counts on recreating an entire parallel universe in 3D in which we will be able to do everything, from work to sports, passing through the management of our social relationships. Already today, with Horizon Workrooms, it is possible to connect with other people and hold virtual meetings in 3D with colleagues and clients anywhere in the world.
Facebook is the company most directly positioned to expand into the metaverse. From the sale of Oculus visors to commissions on purchases that will occur in its version of the metaverse, there will be all sorts of possible revenue sources for the company. The stock is currently trading at very favorable prices compared to current earnings, so it's definitely not a bad idea to invest.
2) Google
Google is the second company to take a look at when it comes to virtual and augmented reality. At the moment, the company has already released a lot of material related to Google Project Glass, which actually looks very different than Facebook's metaverse. In this case, it's not about a parallel universe populated by avatars and totally virtual environments; rather, it's about creating a "mixed reality" that helps the user navigate the real world through the power of technology.
This choice to focus on augmented reality, rather than a totally virtual, parallel universe, is definitely more feasible from a technological standpoint in the short to medium term. Meta's presentation is certainly more impactful, but considering that you often can't even make a video call on WhatsApp without going jerky or losing your connection, skepticism about feasibility is a given.
Google has already implemented a number of services related to the traditional web that help its users to be informed, find ideal routes, collaborate in work environments and interact with other people. Carrying all of this with you at all times, through a pair of glasses, could truly be a revolution. From a shareholder perspective, not only will this allow Google to sell many of its AR/VR glasses, but the company will be able to find new ways to allow companies to advertise, promote and start developing new applications for its viewers, and it will be able to further expand its range of services.
3)Tencent
Chinese companies are certainly not standing idly by while the race to the metaverse begins in Silicon Valley. Tencent, the company at the head of WeChat and many other famous online services born in China, has already expressed its willingness to follow in the footsteps of Facebook, to invest in the metaverse.
In November 2021, Tencent's CEO came out with the company's plans for development in this direction. Even in the age of social media and instant messaging, it was immediately clear that alternatives to all Western services are emerging in China. The local government is quite happy to know that citizen data is not being collected by rival US-based companies.
So, it will be natural to see a Western race to the metaverse, and in parallel one to conquer the huge Chinese domestic market. Tencent is definitely well positioned within this market, and already has the capital to invest in this direction to match the progress of Facebook and Google.
4) Unity Software
Unity is the standard of reference for those who want to create 3D animated models, and video games adaptable to the context of virtual reality. Using Unity, you can create all the objects and experiences that can be integrated within a metaverse. If you want to build a 3D virtual office, for example, you'll need chandeliers and a reception desk: to program these virtual objects, you normally use Unity.
The company attracts many young developers thanks to its free plan, which you can use for small personal projects. When you get to higher levels, however, licenses cost $2,000 per year for each additional developer who joins the team. It takes little to realize the potential of the metaverse for a company to offer the basic infrastructure with which to build all of its components.
If 100,000 new jobs are created from the rise in popularity of virtual reality over the next five years, each with an Enterprise subscription, that would bring $200 million in extra revenue to the company.
From the perspective of a Unity shareholder, it's the perfect technological storm.
One of the interesting aspects of Unity is that it finds great application in the world of game software programming, which are the basis of Meta's expansion model. Already, this sector is generating continued expansion for Unity Software, a company that will be able to ride the full growth path of augmented reality and virtual reality.
5)YDX Innovation
This company is really little known, but at the same time it is extremely interesting. It is a company of pioneers in the world of virtual reality e-sports, 3D industry exhibitions and events, video games and augmented reality related experiences. YDX is still very small, to the point where its shares are currently traded on the US OTC markets.
A very small company implies a speculative investment, but on the other hand, it opens the door to the possibility of an extremely high return should its balance sheet numbers grow. The ability to create valuable technology, undoubtedly, is there. The company has already launched many interesting initiatives and secured investor support. It just needs to start scaling its results. It must always be remembered that the metaverse is not, and cannot be, a space wholly realized by a society. There is too much work required to build such an integrated world. Large companies such as Facebook, Google and Tencent will provide the visors and technological infrastructure needed to build an ecosystem. However, it will be many other smaller companies that will populate the metaverse with projects, video games, spaces, objects, virtual events and so on. Content and creators will be critical to the success of the metaverse. This means that YDX and similar companies are at the forefront of populating a new virtual economy that can potentially scale indefinitely.
6) Nvidia
Nvidia stock is in the right place at the right time to take advantage of the Metaverse trend. The whole world of virtual reality and augmented reality, however it is declined, has a point of contact: it needs computing power and very advanced graphics cards. Who currently provides the best market standard for the world of graphics cards? That's right: Nvidia.
Nvidia's graphics cards are already highly regarded in the world of gaming, video editing and graphics. With all due respect to AMD, it's objective that Nvidia's GPUs are way ahead right now.
The reality is that there are many technical challenges related to the metaverse. Challenges that also and above all concern the hardware part, because you have to find a way to cram a supercomputer inside a small optical viewer that can't weigh too much and at the same time has to be comfortable. That's why Nvidia right now is an extremely valuable partner for any company interested in creating VR viewers.
The other very interesting aspect related to Nvidia's potential in the Metaverse is precisely gaming computers. Currently, the virtual reality market is mainly made of people who access virtual or augmented reality through their devices. Visors are not the only way to enjoy this technology and at the moment they actually have a very small market share. Another reason to consider Nvidia in a metaverse-related portfolio.
7) Microsoft
Microsoft has already been working on its interpretation of virtual reality and the metaverse for some time. Such a large company, which has always been associated with the world of operating systems, cannot remain indifferent to what could be the most significant technological change in the coming years.
Microsoft's flagship product in the world of virtual reality is the HoloLens®. It is a visor totally capable of competing with the world of Facebook Meta. The best thing about this product is that it integrates seamlessly with all other Microsoft products: if you have a Windows computer, the HoloLens can sport many compatible and interesting features already.
In November 2021, news became public that Microsoft is beginning to introduce a 3D version of its Microsoft Teams service. This will allow companies to start collaborating within an embryonic version of the metaverse, where each person will already have their own avatar. This can be a great indication of Bill Gates' company's expansion plans within this sector.
Another interesting thing about buying Microsoft stock, is that it is a great company to invest in even regardless of the fate of the metaverse. It has very high margins on its products, through Microsoft Azure for example it is scaling the world of cloud services, and it has excellent balance sheet figures. So this is an interesting investment regardless, but made more exciting by the prospects of the metaverse.
8) HTC
I list this one almost at the last place, but certainly not for less importance. HTC is in indeed to date one of the most advanced companies in the world of VR visor research and production. With its new Vive Flow glasses and its famous Vive Focus 3, we can already talk about immersion in the metaverse.
Instead of presenting itself on the market as HTC, the company's section dedicated to VR products has been branded Vive. The line of products already on sale is quite extensive and includes features for all kinds of activities: Vive Flow is designed primarily for meditation and immersing oneself within imaginary worlds; the Vive Focus series, on the other hand, is dedicated to the world of work and productivity.
9) Twitch (Amazon)
The most obvious frontier for the rise in popularity of augmented reality is video games. Think about it: it's already happening. The gaming trend is growing tremendously (even more so during the Covid19 pandemic) and the metaverse will only make it grow more. Sure, video game development companies can gain from it, but how do you know what games will be trending in the metaverse?
Think outside the box: whatever game might become popular will always benefit Twitch in the end. In case you're not familiar with it, it's a site owned by Amazon that allows everyone to watch live videos of people playing video games. It has a huge growth in popularity, and you can already follow streams in VR.