The technological revolution, unlike anything we have experienced so far best sums up promises made around the metaverse. In essence, it represents a collection of virtual worlds, designed by companies and individuals with the goal of changing how we connect and interact both socially and professionally.
Estimates are made that this new opportunity is worth trillions of dollars, but whether it reaches its potential is the subject of various debates. The following three stocks could possibly be the leaders in the new space so it is worth keeping a close eye on them.
Snap (NYSE: SNAP)
Snap is the parent company of Snapchat, a popular social media platform focused on camera technology. They have a unique twist on the metaverse which could have them in the drivers seat if the technology takes off.
Snap’s goal is to blend the virtual world with the real one using augmented reality via wearable technology. More specifically augmented reality would project digital experiences into the customer’s vision while they perform their daily activities. This would be achieved using “Spectacles”, wearable glasses designed by the company.
The stock is currently trading in a descending channel below the 20-50-200 day Simple Moving Averages (SMAs) looking for a breakout above resistance lines. Performance of the stock in 2022 is not stellar, however the investing environment at the moment doesn’t favor tech stocks.
Wall Street analysts give the stock a moderate buy, predicting the next 12-months’ average price of the stock to be $53.41. This would represent a potential increase of 59.10% from the current trading price of $33.57.
The moniker of the company resides in the new technology as formerly known Facebook changed its name to reflect the change of the company’s strategy toward new social and digital paradigms.
Meta currently has $16 billion of cash ready to be deployed in new projects with digital currency, avatars, and a new marketplace possibly taking center stage in future investments. The goal of the company is to generate new paradigms through Reality Labs which will deliver consumer hardware products such as Meta Quest, Facebook portal, and various wearables.
Notably, on March 18, Finbold reported Meta filed 8 trademark applications including crypto trading within the metaverse. This was noted by licensed metaverse trademark attorney Michael Kondoudis who stated:
“These filings reflect the company’s strategy for moving into the metaverse. Meta clearly has significant plans for the virtual economy that will drive it.”
The stock performed well until February of 2022 when geopolitical tensions and inflation started picking up. A tech sell-off affected the stock’s performance and it is currently trading slightly below all SMAs looking for a catalyst to propel the stock back up.
Analysts give the stock a moderate buy rating, predicting the next 12-months average price to be $325.48. Potentially the price could have a 51.99% change from the current trading price of $214.14. More bullish analysts see the stock price reaching all the way to $466.
Roblox (NYSE: RBLX)
Roblox is a tech company that operates a human co-experience platform. In essence, this platform enables users to interact with each other, explore and develop user-generated and 3D experiences. The company boasts that over 50 million people use their platform daily to learn, communicate and play.
Roblox reported in February 2022 that they had revenue between $204 and $207 million which represents an increase of 60-63% year-over-year. Key metrics being an increase of users on their platforms by 28% and time spent on the platform by 21% for the same period last year.
The stock did not perform well losing over 48% of its price compared to the beginning of the year. All SMAs have been above the stock price for some time, due to the more recent tech sell-off.
A moderate buy rating is given to the stock with the average next 12-months price seen by analysts at $68.64 a potential increase of 59.63% from the current trading price of $43. The highest price analysts see in the next 12-months is $108.
According to Bloomberg intelligence, the metaverse industry could be worth $800 billion by 2024 with an annual compound growth rate of 13.1%. This means that the opportunity could be worth $1.6 trillion by 2030.
Predictions like these and hype around the technology could potentially offer growth opportunities, unlike anything that has been seen before. Augmented reality and new virtual worlds could become reality and if so, these stocks will stand to benefit from the new trends.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.