The metaverse is an immersive virtual world that mimics the physical world. It can be experienced in Virtual reality (VR),Augmented reality (AR),or on a screen. The metaverse has recently made headlines after Facebook rebranded to Meta Platforms (NASDAQ: FB). As explained by its CEO, Mark Zuckerberg, Meta's vision is to profit from the metaverse since it will be the next generation of the internet.
Several companies are laying their stake on the metaverse as they rush to create their digital “avatars” to attract customers. The real estate business is particularly buying into the concept. Recently, in November, Decentraland, a virtual reality space, sold some 116 parcels of land for about $2.5 million each in cryptocurrencies.
Last month, Morgan Stanley (NYSE: MS), a Wall Street firm, estimated the metaverse to be an $8 trillion business and said it would become the next gaming, social media, and streaming platform. So I want to use this article to highlight three companies that will reap significant gains from the metaverse in the coming years. It will be good to have a stake in those companies.
Microsoft Corporation (NASDAQ: MSFT)
Last month, reiterating its vision for the metaverse, Microsoft had a deal of $69 billion to buy Activision Blizzard, a gaming giant. This made investors serious about Microsoft’s intentions. Microsoft already has a lot of stake in the gaming industry, primarily through its Xbox Game subscription service.
During an interview, the CEO, Satya Nadella, said that their games would evolve from 2D to 3D in anticipation of the metaverse. In addition, Microsoft Teams software would be equipped with Mesh meetings using the metaverse.
The company has strong fundamentals with a market capitalization of $2,31 trillion. The earnings per share from the last quarter stood at $9.39, with a current yield of 0.8%. The share price is currently at $308.76, but analysts expect the share price to increase to $425 this year, with a median estimate of $370, representing a 19.6% increase in the price.
AutoDesk, Inc (NASDAQ: ADSK)
As a metaverse stock, Autodesk (NASDAQ: ADSK) has a good metaverse use case. Engineers and architects use the company’s flagship products to design manufacturable goods and buildings. These creations can then be integrated into a virtual reality application using Autodesk Rendering plugins.
When Autodesk switched to a subscription model a few years ago, its revenues jumped steeply. And the business has had solid results in the market. Revenue was $1.12 billion last year, a rise of 18%, and the stock trades at a price-to-earnings ratio of 47. The stock is currently at $249.6, and analysts expect a rise to $292 this year. As a result, they believe that this is a good buy.
Fastly, Inc (NYSE: FSLY)
Fastly Inc (NYSE: FSLY) operates a content delivery network (CDN) in real-time. This network consists of network servers that are geographically distributed, working together to make the delivery of internet content fast. The company also has several cloud services related to computing, performance, delivery, and security. Fastly will benefit significantly from the metaverse because its product reduces lag time and latency in decentralized applications. The metaverse would need this to transfer large amounts of data through the internet.
Fastly (NYSE: FSLY) has high growth potential. Edge computing, part of its business, is worth $87 billion and growing. Its shares currently hover around $29.20. Analysts estimate the share price will rise to $53 on average for this year.
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