The world of the metaverse is changing quickly, we know that. It presents great new investment opportunities for anyone willing to go after the next wave of digital transformation full throttle. Though NVIDIA usually steals the show, many other companies are doing quite well in this area. Calloutcoin.com delves extensively into the metaverse. From NFT standards to metaverse technologies and digital identity solutions to the latest in DeFi, the guide dives deep—all to bring readers a holistic view of this exciting new landscape. Read on to learn about some of the best metaverse stocks after NVIDIA. It hordes their potential by leveraging recent trading activity, third-party expert research, and investment options to the club’s best-tracking financial analysts.
Identifying Promising Metaverse Stocks
As you consider metaverse stocks to buy, dig a little deeper than the obvious picks. Find the firms that are leading on the innovation front, creating platforms and expanding ecosystems. These are the companies best positioned to deliver the greatest returns while the metaverse develops. For long-term investing, investors should care more about the trend in subscription revenue growth and user engagement. Furthermore, they need to start making bets on virtual and augmented reality (VR/AR) tools.
Focus on Innovation, Platform Development, and Infrastructure Growth
Companies leading innovation, platform development, and infrastructure expansion in the metaverse space will probably be lucrative investments. These companies are helping to set the stage for the metaverse. Whether it’s building virtual worlds, engineering the tools and technologies that power these experiences, or developing the infrastructure for seamless connectivity, they’re right in the thick of it. These companies are at the forefront of the metaverse revolution. Their forward-looking investments could pay off handsomely as the metaverse moves from visionary concept to mainstream reality.
Gaming companies are creating high fidelity rendering engines and 3D modeling software. They’re essential to build personalized and immersive metaverse experiences. Just the same, companies constructing the infrastructure to make high-bandwidth, low-latency connectivity possible are essential to making seamless interactions in the metaverse a reality. By focusing in on these core components, investors can identify the companies that are best positioned to lead the development of the metaverse. This targeted approach helps them invest wisely.
Perhaps most importantly is the area of development—building the tools and platforms that will help us create content in the metaverse. Companies providing user-friendly interfaces and powerful tools for creating virtual assets, environments, and experiences are empowering creators and driving the growth of the metaverse ecosystem. These companies are making the metaverse more accessible by democratizing content creation in this new virtual world. This democratic trend allows many more people and companies to participate in creating our new virtual realities.
Look for Companies with Growing Subscription Revenue
Subscription revenue is one of the best examples of how players and investors should measure a company’s long-term growth potential in the metaverse. Companies with growing subscription revenue streams are demonstrating their ability to attract and retain customers, providing a stable and predictable source of income. This is especially true within the metaverse ecosystem, where constant interaction and repeat business are the keys to long-term success.
Unity Software Inc. (NYSE:U) is a prime example of a company with growing subscription revenue. The firm grew its subscription revenue 15% and its industry segment revenue 50%, which led to a net loss of just under $30M. This increase is a testament to Unity’s platform becoming the go-to development tool for metaverse developers and creators. They’re using Unity’s cutting-edge tools and technologies to create immersive experiences.
Subscription-based models usually build deeper customer connections and offer a more stable revenue flow than single purchases. This stability enables companies to make long-term investments in research and develop with confidence. In doing so, they’re able to improve their service and win new business. Investors are advised to continue watching subscription revenue growth, which should be an indicator of a company’s long-term success in the metaverse.
Subscription models usually have some form of tiered pricing. This framework allows businesses to upsell and cross-sell to their current client base with high margin, added value offerings. This helps them maximize revenue per user and overall profitability. Those that learn to best utilize subscription models, or something else entirely, while operating in the metaverse will come out on top. They will leverage the increasing demand for immersive experiences and virtual assets.
Identify Companies with Strong User Engagement
User engagement is another key metric to look at when gauging metaverse stocks. Companies that are good at user engagement demonstrate their ability to create irresistible experiences. These experiences are proven to pull in new users and make current users re-engage. This is critical to fostering a productive and innovative metaverse economy.
Roblox Corporation (NYSE:RBLX) is a leading example of a company with strong user engagement. The company has released 49 million average daily active users, which is up 33% from one year ago. Plus, users spent an astounding 18.7 billion hours on the platform doing so, up 21%. Right now, Roblox is winning at drawing in the user base that’s monumental. It not only brings them to stay, but keeps them engaged for hours at a time.
The more they use it the more chances there are to monetize within virtual item sales, in-game advertising, and more. The truth is, companies that engage their users most effectively will ultimately be best able to generate sustainable, profitable revenue and fuel long-term growth. Investors looking to engage in the metaverse should make user engagement metrics a first line metric for whether a company is leading or lagging in the metaverse.
Without high, passionate user engagement, network effects cannot flourish. So the more users that belatedly jump aboard and interact with each other, the greater the appeal of the platform itself. This in turn can lead to a virtuous cycle, attracting even more users and further enhancing the platform’s value. The corollary here is that firms that succeed in creating positive network effects in the metaverse will be best-positioned to rule over their competitive niches.
Consider Companies with Investments in VR and AR Applications
Virtual and augmented reality (VR/AR) technologies are critical to developing immersive, interactive metaverse experiences. Businesses pouring billions into VR and AR applications are placing themselves on the cutting edge of the metaverse revolution. These companies and many more are imagining, designing and building the hardware and software that will fuel the next wave of virtual experiences.
To this end, Microsoft and Nvidia stand as notable examples of companies placing major bets on XR applications. Microsoft is heavily doubling down on its HoloLens augmented reality headset. The company has been pouring investment into virtual reality technologies, focused both on gaming and enterprise applications. Nvidia has partnered with Xbox and PlayStation’s parent company. Specifically, they’ve partnered to deliver advanced graphic processing units (GPUs) that power immersive virtual reality (VR) and augmented reality (AR) experiences.
Investments in VR and AR technologies are producing cutting-edge innovations and developing new ways to monetize the demand. Corporate players that leverage VR, AR and other metaverse technologies will reap the biggest rewards. They can stake their claim to a significant share of the growing market for immersive remote experiences. Public equity investors should be closely tracking companies' investments into VR and AR. These investments are becoming the best real-world barometer of their long-term potential in the metaverse.
Furthermore, the convergence of VR/AR with other technologies such as artificial intelligence (AI) and 5G is creating even more exciting possibilities for the metaverse. AI is what makes highly immersive, interactive virtual environments possible. In addition, 5G provides the high-bandwidth, low-latency connectivity needed to create immersive VR and AR experiences. The companies that are best able to leverage and connect these technologies are uniquely positioned to stake the greatest claim to future metaverse leadership.
Monitor Companies with Expanding Digital Sales
Digital sales are a leading indicator of any company’s ability to monetize its products and services in the metaverse. Businesses flush with quickly growing online sales are proving their remarkable flexibility to the fast evolving environment. Clearly, they’re doing a great job putting virtual goods and experiences to work as their audiences increasingly demand them. This is especially true in the metaverse, where digital assets are gaining real-world value and significance.
Autodesk is a case study on what can happen when quickly transitioning to digital, and how fast those digital sales can grow. The company announced stellar quarterly results this week, thanks in part to its booming digital sales. This growth indicates that Autodesk is successfully transitioning its business to a digital model, allowing it to reach a wider audience and generate more revenue.
Building up digital sales can drive top-line growth, but they give businesses deeper data and a greater understanding of how customers shop. This actionable data provides ways to enhance product innovation and service delivery, enable marketing personalization, and discover new avenues for expansion. Investors would be wise to start looking at companies’ digital sales as a primary measure of their progress in the metaverse.
Digital merchandise, licensing, and sales produces better margins than traditional sales. This is possible because they remove the hardware burden of warehousing and distribution. This results in greater profitability and increased returns on investment. Businesses that can successfully tap into new digital sales opportunities in the metaverse will have a tremendous advantage. Most importantly, they create predictable, sustainable revenue and help accelerate long-term growth.
Metaverse Stocks Beyond the Usual Suspects
NVIDIA is one of the metaverse heavy hitters. All of those advancements are happening in the context of massive contributions from other companies and the creation of incredible investment opportunities. These companies are in large part under the radar but could be set to drive big returns as the metaverse develops.
Unity Software Inc. (NYSE:U)
Unity Software Inc. is the world’s largest provider of software development tools to create and operate interactive 2D and 3D content. This has become an extremely popular platform, widely used by game developers, artists, architects and engineers. It enables them to develop rich, interactive worlds for mobile platforms, computers, consoles as well as headsets supporting VR and AR.
Unity’s platform is key to building the virtual worlds and experiences that will make up the metaverse. Its tools give creators unprecedented power to build expansive, immersive, and vibrant environments. They are able to populate these spaces with interactive characters and objects, and then easily deploy them across multiple devices. With the metaverse in rapid development and expansion, Unity’s collaborative platform will only become more essential to the production of interactive content.
The company’s skyrocketing subscription revenue and industry segment revenue show that they are gaining significant traction from metaverse developers and creators. Unity is betting big on the metaverse and other new technologies. They’re putting a big bet on AI + machine learning to improve their platform and arm creators with even more powerful tools.
Roblox Corporation (NYSE:RBLX)
Roblox Corporation further afield runs an online entertainment platform where users can create, share and enjoy imaginative 3D experiences. Its platform is rapidly becoming the most popular medium for young people to game, socialize, and explore their creativity. Roblox is furthering its mission by opening its platform up to more educational and enterprise applications.
With their rich user engagement, increasing user base, and large share of the developer economy, Roblox is certainly an important player in the metaverse. Its platform provides a virtual space where users can interact with each other, create and share content, and participate in virtual events. With these new developments, Roblox is rapidly becoming the go-to place for immersive, social experiences in the metaverse.
The business has stumped up significant amounts of cash to build new tech. Their sights are now set on VR/AR and blockchain to further expand their platform and bring even richer, more immersive, lifelike, and engaging experiences to users. Roblox’s passionate community and developer-first platform go a long way to making it an interesting investment opportunity within the metaverse.
Autodesk (NASDAQ:ADSK)
Autodesk is a leader in design and engineering software. They are deeply integrated into industries such as architecture, engineering, construction, manufacturing, and the media and entertainment industries. Its software is behind the design of everything from the world’s tallest buildings and long-span bridges to cars, aircraft, and movies.
Autodesk’s software is at the core of the 3D models and designs that drive the metaverse. These tools are helping architects, engineers, builders, and designers create complex, immersive, highly detailed virtual worlds. To do this, they can fill these virtual spaces with precise, usable objects and model how they function in the real world. Whatever the form they take, the metaverse is growing. As it expands, Autodesk’s software will be more critical than ever in creating amazing, immersive virtual experiences.
The company's expanding digital sales demonstrate its ability to adapt to the changing landscape and capitalize on the growing demand for virtual goods and experiences. Autodesk is investing heavily in other emerging technologies, such as AI and cloud computing. All of these collaborative attempts are to build on their existing software and provide their users with an expanded set of powerful tools.
Microsoft (NASDAQ:MSFT)
As one of the world’s largest technology companies, Microsoft has made some of the largest investments in the metaverse. Microsoft HoloLens The HoloLens mixed reality/augmented reality headset, still considered the top dog in enterprise applications. At the same time, Xbox gaming platform is an important part of virtual reality. Microsoft is investing heavily in other cloud computing and AI technologies that are key to underpinning the metaverse.
Microsoft’s mixed portfolio of products and services puts them in an interesting position within the metaverse. Gaming, industrial applications, and spaces like the HoloLens headset make for a fantastic platform. At the same time, the Microsoft Xbox gaming platform provides thrilling, immersive virtual reality experiences. Microsoft’s cloud computing and AI technologies will give developers and businesses the infrastructure and intelligence to build the metaverse.
The conglomerate Taiwan-based company is focusing their investments on transformative technologies such as blockchain and digital twins. This acquisition would be a major boost for its metaverse offerings. With a strong balance sheet and its diverse portfolio, Microsoft is a safer, more stable investment in the metaverse.
Nvidia (NASDAQ:NVDA)
Nvidia dominates the market for graphics processing units (GPUs). These are some of the powerful tools that are key to creating realistic and immersive virtual experiences. Its GPUs power gaming consoles, PCs, and data centers running VR and AR applications to boot. Nvidia’s investing in AI and machine learning technologies that are key for the global metaverse to thrive.
Nvidia’s GPUs aren’t the only thing powering the metaverse. They provide the processing power needed to produce complex digital worlds and allow for life-like interactions. As the metaverse expands further, so will the need for Nvidia’s GPUs. Nvidia is investing in new technologies, such as ray tracing and AI-powered rendering, to further enhance its GPUs and provide even more realistic and immersive virtual experiences.
The company’s extensive partnerships with other gaming titans Xbox and PlayStation show its industry dominance as king of the gaming market. As the metaverse grows, Nvidia’s cutting-edge technology and dominating market position should make it a smart investment.
Alternative Investment Opportunities in the Metaverse
Beyond directly investing in individual stocks, there are a few different kinds of alternative investment opportunities within the metaverse. Another way to invest in the metaverse is by purchasing metaverse-themed exchange-traded funds (ETFs). Learn about real estate in the metaverse and learn about digital assets such as NFTs!
Metaverse-Focused Exchange-Traded Funds (ETFs)
Metaverse-themed ETFs offer a diversified, convenient option for investors looking to invest in the metaverse. These ETFs target companies across all four modes of transportation. They purposefully fund those leading in development of metaverse technologies, platforms, and content. Investing in a metaverse-focused ETF is a safer way to get into the metaverse. All in all, this strategy can be much safer than investing your cash straight into specific stocks.
Currently two of the hottest metaverse-focused ETFs are the Roundhill Ball Metaverse ETF (METV) and the ProShares Metaverse ETF (VERS). These ETFs provide investors with exposure to a broad range of companies involved in the development of the metaverse. That’s certainly true of all the ones I listed above.
For the average investor, investing in a metaverse-focused ETF is the best option. It provides an easy way to get exposure to the metaverse without dedicating countless hours of research on single stocks. ETFs provide the added advantage of instant diversification to lower risk.
Real Estate in Virtual Worlds
Virtual land is another growing investment trend in the metaverse. Virtual territory can be acquired, built out, and flipped at high margins à la real world real estate. Virtual landowners are already busy renting out their virtual spaces. Businesses and individuals wanting to get ahead of the metaverse curve are jumping on these opportunities.
Virtual real estate can be purchased in a variety of virtual worlds, such as Decentraland, The Sandbox, and Somnium Space. That’s because the value of virtual land can differ drastically based on where it’s located, how big it is and what it can be developed into. RISK/REWARD PROFILE Low/Medium Investing in virtual real estate could be a profit-rich play.
One of the key drivers of value for virtual land is its proximity to popular destinations and events within the virtual world. Land around virtual marketplaces, entertainment centers, and community centers are more precious. In opposition, land in rural or isolated areas is typically much less attractive soil.
Digital Assets such as NFTs
NFTs are digital assets with unique identifying codes and metadata that distinguish them from one another. NFTs can be used for so much more than just digital art. These can be anything from digital art, to music, videos, and even virtual real estate. NFTs are currently all the rage in the metaverse. They provide some of the most secure and transparent ways for individuals to own and trade digital assets.
Investing in NFTs is a speculative endeavor at best, but can yield huge returns on your investment. The value of NFTs ranges dramatically based on rarity, uniqueness, and demand. The market for NFTs is extremely volatile, with some NFTs selling for millions of dollars and others dropping in value to zero.
One of the primary factors fueling the value of NFTs is their limited availability. Additionally, NFTs that are scarce or issued in limited quantity have been known to command higher market prices compared to NFTs that are easily accessible. The third is the reputation and popularity of the artist/creator of the NFT.
Financial Analysts' Suggestions for a Diversified Portfolio
Financial analysts suggest investors mitigate risk and earn the most potential profit by diversifying their portfolio and investing in a combination of various metaverse stocks and alternative investment options. This allows them to earn more yields and provide risk-adjusted long-term growth potential over the current near-zero yield environment.
Here are some suggestions from financial analysts for building a diversified metaverse portfolio:
- Allocate a portion of your portfolio to established technology companies such as Microsoft and Nvidia, which are investing heavily in the metaverse.
- Invest in companies that are building the foundational layers of the metaverse such as Unity Software and Autodesk.
- Consider investing in companies with strong user engagement such as Roblox Corporation.
- Explore alternative investment opportunities such as metaverse-focused ETFs, real estate in virtual worlds, and digital assets such as NFTs.
By investing in a diversified portfolio of assets and doing detailed research on each metaverse investment, you can set yourself up to succeed in this new digital world.
Conclusion
The metaverse offers myriad ways to play as an investor if you’re willing to dive deeper than the most pantheon-like options. We know that NVIDIA owns the industry right now. The more traditional companies enabling these powerful creators—companies like Unity, Roblox, and Autodesk—are bearing immense innovations and highly compelling investment opportunities. Other investment opportunities like metaverse-based ETFs, virtual real estate, and NFTs offer more routes for diversification. By thoughtfully addressing these opportunities, investors can continue to create a more balanced portfolio. By keeping in step with the advice from the financial analysts, they’ll position themselves to take advantage of the metaverse’s exploding growth. Calloutcoin.com is committed to providing smart, thoughtful analysis of these trends. We guide individual investors through the complicated, high-risk, constantly evolving world of blockchain and crypto investments.
