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What Investors Should Consider When Stepping Into the Metaverse

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Mark Zuckerberg is betting that the metaverse will be the next big thing for Meta stock. Formerly known as Facebook, Meta will spend at least £7.4 billion in 2022 to create the virtual world of the metaverse, which Zuckerberg hopes will become the gold standard for games, social networking and virtual work environments. 

With so much potential to grow, Maxim Manturov, Head of Investment Research at Freedom Finance Europe, outlines what metaverse stocks to watch out for and if it’s worth buying metaverse real estate.

What is the metaverse?

Part of the next iteration of the internet that some call Web 3.0, the metaverse is a virtual online world, mirroring real life without being constrained by its rules. Over the next few years, we will probably all be working, playing, communicating, and investing in this overarching ecosystem. Tech companies will be working hard on accessories that will take the metaverse experience to the next level, such as with next-generation virtual reality headsets, controllers and other hardware.

In 2022, the metaverse is likely to transition into a business phase, introducing a wide range of services. With the combination of virtual reality (VR) and augmented reality (AR), the metaverse offers companies many practical benefits beyond the usual teleconferencing services. Some of the biggest tech giants are now turning to this burgeoning industry, such as Amazon, AMD, Nvidia and Apple.

So, with so much hype surrounding the metaverse, what metaverse stocks are worth investing in?

Top metaverse stocks

Unity: For smaller companies like Unity (or Roblox), the metaverse creates more accelerated growth opportunities, which was momentarily reflected in the price and interest from investors. Unity is betting on becoming a leader in the metaverse by creating 3D content in VR and AR. By empowering creators with its tools, it is strategically positioned to capture most of the market share.

Nvidia: VR and AR will require mobile edge computing and cloud-based gaming solutions, such as with Nvidia Grid vGaming, which can support up to 160 PC games simultaneously. The Nvidia RTX server can easily meet high power and compute requirements, and thus Nvidia will generate high revenues from hardware sales over the next few years, in addition to growing revenue from cloud game subscriptions.

VR (Horizon Worlds and Supernatural): Meta has offered to buy the VR fitness app Supernatural, thereby acquiring an even larger share of the VR market when combined with the strong sales of its Quest 2 headset. Meta also opened its Horizon Worlds virtual space from beta, allowing game developers to gain access to new tools for creators. Investors should treat its opening as a positive catalyst.

Amazon: Regardless of who ultimately leads the development of the metaverse and what form it will eventually take, we know that the number one requirement will be unprecedented computing power – power that must mostly come from the cloud. That means potential opportunities for Amazon AWS. As a result companies across many industries could look to AWS for their on-demand cloud computing solutions.

Should you invest in Metaverse real estate?

Real estate in the metaverse is a completely niche market, albeit one with a very passionate fan base. However, if the metaverse platform collapses your investment fails along with it. Unlike real property, metaverse property will also disappear completely if the platform fails financially. Therefore, investing in digital real estate is very risky, and you should only invest capital that you are prepared to lose. As it is very speculative at this stage and there is a good chance of running into a bubble and losing money, it’s best to stay away for now.