A Beginner’s Guide To The Metaverse & Metaverse Stocks
Facebook’s Meta Platforms (NASDAQ:FB) has brought mainstream attention to “the metaverse.” Though this isn’t something completely new, it has sparked interest from the public, looking for ways to take advantage of what some call the evolution of the internet. Metaverse stocks are quickly making their way onto watch lists right now. It’s overwhelming at times with such a broad scope as to what can or can’t be considered a metaverse company. Lucky for you, you’ve landed on this page.
What Is The Metaverse?
There are many nuances to the metaverse. In this article, we’ll look at the “big picture” definition of the metaverse. If you’re familiar with the movie Ready Player One or ever dabbled with games like Second Life, you’ve seen the metaverse in action. This is a virtual ecosystem or environment where people can engage and interact similarly to how they would in real life. But there’s a digital twist.
An avatar becomes your eyes and ears in this virtual landscape. This comes with a slew of opportunities both for users and businesses to capitalize on. Everything from digital assets and gaming to virtual and even real estate has a place in the metaverse. Since this is such a fledgling industry, there is still no definitive rule that says a company can or can’t be considered a metaverse company.
Non-Meta Brands Jumping Into The Metaverse: A Sign Of What’s To Come
If you bought virtual Nike (NYSE:NKE) sneakers for your avatar, could that make Nike a metaverse stock? Shopping in a virtual storefront and purchasing virtual products then sending them to a physical address so you and your avatar can “twin” your way through both worlds doesn’t seem unlikely either. You should also consider the company’s latest push for its virtual world, NIKELAND using the Roblox platform as its host. The fact that the brand is already making a play on the metaverse could signify things to come. There are myriad ways that the metaverse could become an active part of everyday life, and those ways might not even be a reality yet.
What’s more, the idea of “metaverse” and its search interest has become a trendy topic on Google starting in the fourth quarter of 2021 (see Google Trends image above). I think now, more than ever, could be your time to start getting familiar with the metaverse and how that can impact you as an investor.
The Metaverse Check-List
If you’re new to “the metaverse,” here’s a quick checklist to understand what you’re looking at when it comes to companies within this new niche:
- The virtual world is constant – there is no “final boss” or ending credits nor plan of doing so. It persists indefinitely.
- Depending on the platform, there aren’t restrictions for use. There’s open participation. I will say that when it comes to child-specific metaverse settings, there’s likely a few restrictions based on safety issues.
- There’s an in-world economy with some type of currency. Whether it’s coins, logs, gems, etc., most metaverse platforms will have some sort of open exchange system.
- Unrestricted ability for users to build and expand the digital universe. Anyone that’s part of the metaverse can contribute to it and/or enhance it further via different actions taken.
- Peer-to-peer interaction – each user in a metaverse is their own, individual person. It’s not like Zelda where you only engage with bots. Peer-to-peer allows for active collaboration within the metaverse.
This metaverse checklist will evolve as people find more ways of benefiting from virtual and augmented reality platforms.
Thinking outside of the box is precisely what got us here today. These are still just the early days of a more mainstream metaverse industry. In consideration, I’ve broken things down into a few “buckets” or sub-sets of this new virtual landscape. There will be some overlap with certain companies, and some have yet to announce any focus on metaverse technology formally. But due to their industry participation, they could, at least, have sympathy exposure for now. Furthermore, this list of metaverse stocks will continue evolving. For now, here’s a “quick” list to take a look at.
Metaverse Stocks For Infrastructure
The framework necessary to build this virtual ecosystem is the first place to start. Just as any structure, city, or website, for that matter, needs a sound foundation, so too will the metaverse. When it comes to metaverse stocks for infrastructure, many of these will likely overlap into other subsets. But for this list of metaverse stocks, we’ll look at the companies that have a hand in building the “back-end” of this virtual world.
- Advanced Micro Devices Inc. (NASDAQ:AMD)
- NVIDIA Corporation (NASDAQ:NVDA)
- Intel Corporation (NASDAQ:INTC)
- Meta Platforms Inc.
- Roblox Corporation (NYSE:RBLX)
- Alphabet Inc. (NASDAQ:GOOG)
- Microsoft Corporation (NASDAQ:MSFT)
- Snowflake Inc. (NYSE:SNOW)
- Switch (NYSE:SWCH)
- Unity Software Inc. (NYSE:U)
- QUALCOMM Incorporated (NASDAQ:QCOM)
- Autodesk Inc. (NASDAQ:ADSK)
- MicroStrategy Incorporated (NASDAQ:MSTR)
- Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM)
- Lumen Technologies Inc. (NYSE:LUMN)
- Cloudflare Inc. (NYSE:NET)
- Fastly Inc. (NYSE:FSLY)
- International Business Machines Corporation (NYSE:IBM)
- Matterport Inc. (NASDAQ:MTTR)
- Micron Technology Inc. (NASDAQ:MU)
- Akamai Technologies Inc. (NASDAQ:AKAM)
- Palantir Technologies Inc. (NYSE:PLTR)
- The Glimpse Group Inc. (NASDAQ:VRAR)
- Lumentum Holdings Inc. (NASDAQ:LITE)
- Broadcom Inc. (NASDAQ:AVGO)
Metaverse Stocks For Commerce & Payments
As is the case with the real world, the metaverse ecosystem will likely entail virtual or VCommerce. Everything from payment platforms to mediums of virtual goods exchange is on the table (and anything else that may materialize from this new ecosystem). With that, some companies could be ramping up to get their part of MetaCommerce:
- Square Inc. (NYSE:SQ)
- PayPal Holdings Inc. (NASDAQ:PYPL)
- Shopify Inc. (NYSE:SHOP)
- SoFi Technologies Inc. (NASDAQ:SOFI)
- Mastercard Incorporated (NYSE:MA)
- Visa Inc. (NYSE:V)
- Fiserv Inc. (NASDAQ:FISV)
- Coinbase Global Inc. (NASDAQ:COIN)
- Affirm Holdings Inc. (NASDAQ:AFRM)
- Apple Inc. (NASDAQ:AAPL)
- Fidelity National Information Services (NYSE:FIS)
- Shift4Payments (NYSE:FOUR)
- Bakkt Holdings, Inc. (NYSE:BKKT)
Metaverse Stocks For Communications, Entertainment, & Gaming
Maybe it isn’t the entire premise of the metaverse. The idea of virtual worlds has deep roots in the gaming and entertainment niche. With the anticipated evolution of “the metaverse,” the lines will likely get blurred between what’s available in “real life” versus what we encounter in any of the metaverse ecosystems. Gaming, entertainment, and communications will be easily identified as needs and wants by anyone taking part. Here are some of the companies that could be vying for positions or enhancing platforms to accommodate metaverse users:
- Zynga Inc. (NASDAQ:ZNGA)
- Electronic Arts Inc. (NASDAQ:EA)
- Activision Blizzard Inc. (NASDAQ:ATVI)
- Take-Two Interactive Software Inc. (NASDAQ:TTWO)
- Match Group Inc. (NASDAQ:MTCH)
- PLBY Group Inc. (NASDAQ:PLBY)
- Dolphin Entertainment Inc. (NASDAQ:DLPN)
- The Walt Disney Company (NYSE:DIS)
- Netflix Inc. (NASDAQ:NFLX)
- Sony Group Corporation (NYSE:SONY)
- Zoom Video Communications Inc. (NASDAQ:ZM)
- AT&T (NYSE:T)
- Tencent Holdings Ltd. (OTC:TCEHY)
- Cinedigm Corp (NASDAQ:CIDM)
- Mattel Inc. (NASDAQ:MAT)
- GameStop Corporation (NYSE:GME)
- DraftKings Inc. (NASDAQ:DKNG)
- UBISoft Entertainment (OTC:UBSFY)
- Skillz Inc. (NYSE:SKLZ)
- Bilibili Inc. (NASDAQ:BILI)
- Live Nation Entertainment Inc. (NYSE:LYV)
Metaverse Stocks For Security
How can we discuss virtual worlds without talking about the dark side of things? Just like in real life, there’s likely going to be no shortage of bad actors in the metaverse. Data has become a hot commodity. Whether accessing information like banking credentials or sensitive images and digital assets, cybersecurity should play a prominent role. With that will be plenty of stocks to watch:
- CrowdStrike Holdings Inc. (NASDAQ:CRWD)
- Okta Inc. (NASDAQ:OKTA)
- Cisco Systems Inc. (NASDAQ:CSCO)
- Palo Alto Networks Inc. (NASDAQ:PANW)
- Splunk Inc. (NASDAQ:SPLK)
- Juniper Networks Inc. (NYSE:JNPR)
- Ping Identity Holding Corp. (NYSE:PING)
- NortonLifeLock Inc. (NASDAQ:NLOK)
- SolarWinds Corporation (NYSE:SWI)
- DocuSign Inc. (NASDAQ:DOCU)
- Sumo Logic Inc. (NASDAQ:SUMO)
- VeriSign Inc. (NASDAQ:VRSN)
- Tenable Holdings Inc. (NASDAQ:TENB)
- Qualys Inc. (NASDAQ:QLYS)
- Datadog Inc. (NASDAQ:DDOG)
Metaverse Stocks For “In-Verse” Marketing & Advertising
Drive a car on a highway, see a billboard. Walk through a mall, see an advertisement on a marquis. Jump on the internet, see countless pop-ups; starting to see where I’m going? Just because the metaverse is “new” doesn’t mean that tried and true industries will disappear. One of the industries that could play a sizeable role is marketing & advertising. This is something larger brands and even political campaigns are folding themselves into.
Everything from avatar skins to “in-verse” billboards are a few ways that advertisers can engage with consumers. Former President Barack Obama’s last campaign prompted early voting. In particular, we saw popular games like Burnout Paradise, and some Madden franchise titles reach online gamers & younger voters via passive advertising. The target audience was males between 18 and 34 years old. Billboards were seen within the games via their online portals. As they say, the rest is history, and with the metaverse, I’m sure we’ll see plenty more iterations of “Metamarketing”:
- The Trade Desk Inc. (NASDAQ:TTD)
- Digital Turbine Inc. (NASDAQ:APPS)
- PubMatic Inc. (NASDAQ:PUBM)
- Applovin Corporation (NASDAQ:APP)
- Omnicom Group Inc. (NYSE:OMC)
- Lamar Advertising Company (NASDAQ:LAMR)
- Magnite (NASDAQ:MGNI)
- Verizon Communications Inc. (NYSE:VZ)
Metaverse Stocks For Hardware
Who said the metaverse needs to be solely virtual? Mass adoption of this new ecosystem isn’t likely becoming a reality on a grand scale right now, at least in the near term. However, things like augmented reality are growing in popularity thanks to early metaverse adoption. Combining the real with the virtual world will further bring this technology into everyday life. With this, hardware is another aspect that the metaverse can impact. This could also have investors looking for some exposure from a “picks and shovels” angle:
- Vuzix Corporation (NASDAQ:VUZI)
- Snap Inc. (NYSE:SNAP)
- Meta Materials Inc. (NASDAQ:MMAT)
- MicroVision Inc. (NASDAQ:MVIS)
- Immersion Corporation (NASDAQ:IMMR)
- Corsair Gaming Inc. (NASDAQ:CRSR)
- Turtle Beach Corporation (NASDAQ:HEAR)
- EssilorLuxottica (OTC:ESLOY)
Metaverse Stock ETFs
Now, if investing in or buying individual stocks scares you or isn’t your cup of tea, there are a few ways to play the metaverse trend with a more passive approach: Exchange Traded Funds. Some of these “Metaverse ETFs” have direct exposure to companies partaking in this new space. Meanwhile, I’ve also included some less-directly-connected ETFs for the fact that tech, in general, could become a hotbed for industry growth:
- Roundhill Ball Metaverse ETF (NYSEARCA:META)
- iShares Virtual Work and Life Multisector ETF (NYSEARCA:IWFH)
- ETFMG Prime Cyber Security ETF (NYSEARCA:HACK)
- Technology Select Sector SPDR ETF (NYSEARCA:XLK)
Metaverse Stocks & What Comes Next
Summing things up, this idea of the metaverse is fresh, new, and exciting. It can also bring many unanswered questions. The main reason is that it’s not a mainstream “thing” yet. Similar to what we see with penny stocks, we’re in the discovery portion of this industry lifecycle, the left-side of the bell curve, so to speak.
The vast majority of investors and potential consumers are novices at this point. There will be plenty to come, as we’ve already seen with moves by companies like Nike getting an early foothold (no pun intended) by leveraging relationships with Roblox.
Speculation will undoubtedly play its part in the stock market. That’s why it’s essential to have a basic understanding of the market landscape, whether we’re talking about blue chips or penny stocks. Headlines, rumors, or even filings mentioning this new buzzword are likely to become more prominent catalysts.
You want to properly dissect the detail & understand the lasting or fleeting impact they could have on the market. As more advancements come, new companies form, and technologies evolve, we’ll make sure to update this list of metaverse stocks.
The author owns shares of Microsoft, Disney, Apple, Nike, Qualcomm, Amazon, Verizon, Cisco, IBM, Activision Blizzard, Intel, Google, & Mastercard.
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