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 (FB).
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.
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
Meta Platforms Inc. FB
Zacks Rank #3 (Hold) Meta Platforms or Facebook is the top mot long-term bet. Facebook will now invest $50 million over a two-year period on metaverse initiatives through its recently introduced XR Programs and Research Fund.
Zacks Rank #3 Nike is acquiring a virtual sneaker and collectibles start-up, RTFKT. RTKFT boasts one-of-a-kind virtual products and experiences created by leveraging the latest in-game engines, non-fungible tokens, or NFTs, blockchain authentication and augmented reality. The move is part of the company’s digital transformation plan. The buyout is expected to expand NIKE’s base in the metaverse, with additional digital capabilities.
Retail giant Walmart has also plans to enter the field of highly immersive virtual reality/augmented reality (VR/AR) and Blockchain-based world. 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.
Though Zacks Rank #2 (Buy) Apple is not quite into Metaverse, investors can bet on Apple’s augmented-reality ambitions. The iPhone-maker’s rumored headset is the most anticipated product in 2022.
ETFs in Focus
Roundhill Ball Metaverse ETF META
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 75 bps in fees.
Amplify Transformational Data Sharing ETF BLOK
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
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.
Wedbush ETFMG Video Game Tech ETF GAMR
Online game makers including Roblox, Microsoft, Activision Blizzard, Electronic Arts, Take-Two, Tencent, NetEase and Nexon may increase engagement and sales by cashing in on the growth of 3D virtual worlds, per Bloomberg.
Global X Video Games & Esports ETF looks to invest in companies that develop or publish video games, facilitate the streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues or produce hardware used in video games and esports, including augmented and virtual reality. GAMR charges 75 bps in fees.
Infrastructure Stock Boom to Sweep America
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Apple Inc. (AAPL): Free Stock Analysis Report
NIKE, Inc. (NKE): Free Stock Analysis Report
Walmart Inc. (WMT): Free Stock Analysis Report
Meta Platforms, Inc. (FB): Free Stock Analysis Report
Wedbush ETFMG Video Game Tech ETF (GAMR): ETF Research Reports
Amplify Transformational Data Sharing ETF (BLOK): ETF Research Reports
Global X Data Center REITs & Digital Infrastructure ETF (VPN): ETF Research Reports
Roundhill Ball Metaverse ETF (META): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.