Looking to Invest in the Metaverse? Here are 3 Stocks to Consider.
Introduction
The term “metaverse” is made up of 2 words: “meta” and “verse”. Meta means beyond and verse means universe. Combining the 2 words, we get beyond the universe. Put simply, it allows us to experience things and places without being physically there.
In general, the metaverse refers to shared virtual spaces which people can access through the internet. These virtual or digital spaces are made to look like reality via virtual reality.
Proponents of the metaverse view it as an improvement of the Internet that we know today. The metaverse seeks to allow people to fully immerse themselves in digital content instead of just viewing it from an internet browser.
The metaverse consists of augmented (AR), virtual reality (VR), and mixed reality. According to Statista, the market size is expected to increase almost 10-fold over the next 3 years.
With that, here are some stocks that allow us to tap into this exciting new space!
Meta (MVRS)
I’m sure this company needs no introduction. To expand their business beyond social media, Facebook recently rebranded to Meta. Going forward, Meta will be the parent company of Facebook (like how Alphabet is the parent company of Google).
The software underpinning Mark Zuckerberg’s take on the metaverse is called Horizon. Without going into too much detail, CEO Mark Zuckerberg believes that there will be a “pretty important role” for crypto technology like NFTs and smart contracts in the metaverse.
Meta has a few ongoing projects:
Project Cambria- a high end, mixed reality headset that mixes virtual graphics with the real world in full colour.
Nazaré- AR glasses with displays capable of overlaying computing onto the world around you.
Nvidia (NVDA)
Another company set to benefit from the metaverse is Nvidia.
How NVIDIA Omniverse Creates, Connects Worlds Within the Metaverse
The omniverse can be broken down into 3 parts:
- Nucleus: A database engine that connects users and enables the interchange of 3D assets and scene descriptions. Omniverse Nucleus relies on USD, or Universal Scene Description, an interchange framework invented by Pixar in 2012.
- Composition, Rendering and Animation Engine: the simulation of the virtual world. Thanks to NVIDIA RTX graphics technologies, it is fully path traced, simulating how each ray of light bounces around a virtual world in real-time.
- NVIDIA CloudXR: Includes client and server software for streaming extended reality content from OpenVR applications to Android and Windows devices, allowing users to portal into and out of Omniverse.
We can teleport into Omniverse with virtual reality, while AIs can teleport out of Omniverse with augmented reality.
Meta ETF (META)
If you don’t want the headache of identifying the company that’s going to be the winner in the metaverse space, then perhaps consider an ETF like META
META is an exchange traded fund (ETF) that seeks to track the performance of the Ball Metaverse Index. The Index is composed 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.
We can get a good idea of who the key players in the metaverse are by looking at the top 10 holdings of the ETF.
Conclusion
Covid-19 has accelerated the adoption of remote working, changing the way we socialise and work in the virtual world. The idea of living in the virtual world is still a new concept for us. It is good to have some exposure to a market which is set to demonstrate strong growth over the coming years. This can be through individual stocks such as Meta (MVRS) or Nvidia (NVDA) or a broadly diversified ETF like the META ETF (META).