The hype around the metaverse may have died down in recent months, but plenty of companies are working on immersive gaming or learning experiences. Here is a collection of stocks poised to benefit from growth of the metaverse.
- Baidu has partnered with Qualcomm to speed up development of metaverse applications.
- Meta CEO Mark Zuckerberg has unveiled photo-realistic avatars.
- Sony has hinted at plans to create a game-type metaverse.
The Mixed Reality Stock
Baidu [BIDU] inked a deal with Qualcomm’s [QCOM] China unit in September, according to a post on local messaging service Weixin. The partnership will see the internet giant combine artificial intelligence (AI), mixed reality (XR) and other emerging tech to develop applications for various industries, including education, sports and tourism. Baidu will be able to create these applications faster by making use of Qualcomm’s Snapdragon Spaces XR development platform.
The Avatar Stock
Meta [META] CEO Mark Zuckerberg has recently taken part in the first-ever interview hosted in the metaverse using photo-realistic avatars and VR headsets. Known as codec avatars, they are created through an extensive scan of a face, which is then turned into a model, Zuckerberg told the Lex Fridman Podcast. The hope is that one day you will be able to “just take your phone, wave it in front of your face for a couple of minutes, say a few sentences, make a bunch of expressions... and then produce something that’s of the quality of what we have right now”, said Zuckerberg.
The Immersive Learning stock
Roblox [RBLX] launched on Meta’s Quest VR headsets at the end of September. On the first-quarter earnings call back in May 2021, Roblox CEO David Baszucki said that the hardware made “perfect sense” for the company and its immersive gaming and learning experiences. Roblox is already compatible with other VR headsets, including Oculus Rift. Users normallyhave to connect their VR headset to a computer to play, whereas Quest VR users won’t have to. They’ll also be able to buy and download Roblox directly using their headset.
The NFT Stock
South Korean video game studio Krafton [259960.KS], best known for its battle royale mobile game PUBG: Battlegrounds, announced in September that it’s launching an NFT and blockchain technology-based game akin to the immersive playing experiences offered by Roblox. Users will be able to buy digital assets from content creators within the metaverse. The platform, known as Overdare, will have a soft launch in December before being rolled out globally in the first half of 2024.
The Gaming Stock
Sony [6758.T] subsidiary Sony Interactive Entertainment plans to expand its PlayStation VR2 headset, which went on sale earlier this year. In a Q&A exchange with investors from Fidelity, published in documents related to the Activision Blizzard [ATVI]–Microsoft [MSFT] court case, Sony Interactive Entertainment CEO Jim Ryan said the company is working on projects “in terms of creating some sort of game-type metaverse”. He added that “Sony’s entertainment assets have huge potential in the metaverse area”, as PlayStationLifestyle reported.
Another Way to Invest in the Metaverse
The Roundhill Metaverse ETF
ETFs, or exchange-traded funds, offer an economical and diversified way to invest in a variety of stocks within a particular theme.
The Roundhill Metaverse ETF [METV] holds all five stocks. As of 30 September, gaming platforms account for 23.5% of the portfolio, while computing components have a 21% allocation. Cloud solutions and social networks have weightings of 16.1% and 9.7%, respectively, and 29.3% has been weighted to ‘other’ sectors. The fund is up 34.3% year-to-date.
The Global X Metaverse ETF [VR] currently holds Meta, Krafton and Roblox. The fund has allocated 65% of its portfolio to communication services and 26.1% to information technology. Financials and consumer discretionary have weightings of 5.7% and 3.2%, respectively. The fund is up 26.6% year-to-date.
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