Investing in the Metaverse: Stocks to Buy
According to numerous estimates, the annual Metaverse market will amount to $ 1 trillion by the end of the decade. The rapid pace of growth is not surprising: savvy investors have in fact learned that the technology sectors are growing at ever faster rates. Suffice it to remember that in less than 20 years of life, the social media platform Facebook has gone from being a simple idea developed in a university dormitory, to being a technological conglomerate that today operates under the Meta Platforms brand and that has had a market valuation exceeding $ 1 trillion in 2021.
Subsequently, the price of Meta 's shares fell about 58% from an all-time high a year ago, in the context of a broader sell-off in the tech sector. However, the company is strongly focused on its long-term future believing that the Metaverse will be the next generation of social and professional networks. Precisely for this reason it is investing heavily to achieve a leading position in this emerging sector.
Estimates of the potential value of this opportunity vary widely, but many of them follow a consistent theme: the business will be measured in trillions of dollars by 2030. This is why investors should own Meta shares to capture some of this value. .
Invest in the Metaverse today
Having said the above, it should be remembered that many investors are rather skeptical about life in a virtual world and the development of a sustainable business in it.
Indeed, rather vivid doubts have been expressed about the ability to sufficiently replace real human interaction and the willingness of consumers to spend money on digital goods. However, building immersive virtual experiences seems like the natural route to technology given the ample time people already spend online across various devices.
Furthermore, it must be remembered that although smartphones and computers, as they exist today, allow the user to consume content, the same devices have rather limited capabilities in terms of interaction . The Metaverse, which will be accessible through a wearable viewer, will theoretically give the user a sense of presence in these experiences similar to that of being in a room with another person. It will facilitate social conversations, dating and even professional collaboration.
The latter is a perspective that Meta is exploring with its mixed reality headsets, which allow the user to observe the physical world around him while digital improvements in his vision are broadcast, as well as having virtual reality capabilities. complete. Cambria could become a valid replacement for the typical office workstation, because it will support all the functions of a computer, without employees having to remain confined to their desks.
This next-generation headset, expected to hit the market soon, could be equipped with revolutionary eye and face tracking technology that would allow the wearer to translate real-life expressions on their digital avatar when interacting with other Metaverse users. . This would certainly help create the aforementioned feeling of presence.
Invest in Meta shares
Meta Platforms conducts all of its Metaverse R&D activities under its Reality Labs division , making it very easy for investors to track how much the company is spending on the project. The Reality Labs segment recorded a loss of just over $ 10 billion in 2021, and in the first six months of 2022 it recorded a further loss of $ 5.7 billion.
Obviously, these are mind-boggling figures. But investors need to know that some of these expenses could be considered an investment for the future. Additionally, consider that the $ 5.7 billion loss in 2022 so far has represented only 10% of Meta's total $ 56.7 billion revenue over the period. Not to mention the fact that the company is profitable and managed to make a net profit of $ 14.1 billion in the first half of 2022.
It is true that Reality Labs is starting to dent the "bottom line", given that Meta's net profit was $ 19.8 billion in the same period last year, and this is one of the reasons why the investors have sold its shares so heavily in recent times.
Despite this, we believe that investing in Meta is worthwhile . Because?
- the company has a portfolio of incredible activities like Facebook, Instagram and WhatsApp, which are used by over 3.6 billion people every month, which is almost half the population of the entire planet
- based on $ 12.07 in earnings per share (earnings) in Meta's 12-month trailing period, its stock is trading at a price / earnings ratio of just $ 13.2, at a significant discount to the rest of the tech sector .
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