As many tech companies have sensed the excitement and are making moves to be part of the next big thing, the opportunity for investors is considerable. The key is to choose the stocks that are set to benefit the most from the rush to the metaverse. However, most likely only a few are going to be integral to the metaverse, reaping the big rewards.
There is quite a bit you should know before you start investing. If you want to invest in metaverse stocks right away, here is a quick guide that can help:
- Research your metaverse stocks – You can get exposure to stocks of entities that are involved in the creation and make-up of the metaverse.
- Define your strategy – Trading lets you speculate on the price movement; dealing lets you take direct ownership of the metaverse stocks.
- Take your position – create an account with us to start trading or investing in metaverse stocks.
What is a metaverse?
The metaverse is a virtual space that's collectively owned and shaped by the community. This virtual space allows people to meet, socialize and attend virtual events such as concerts, work, and games. Oftentimes, Web3, blockchain, and NFTs are correlated with the metaverse. This technological combo is seen as a huge revolution for digital products and experiences.
The first time many investors heard of the concept was in October 2021 when Facebook announced it was changing its name to Meta Platforms, with a focus on bringing the metaverse to life.
Two months later, Bloomberg projected that the metaverse could be a nearly $800 billion market opportunity. At the start of Q2 2022, Citi released a report that projects the addressable market for the metaverse will reach between $8 trillion and $13 trillion by 2030.
In other words, the metaverse is on track to dwarf other high-profile technology trends including electric vehicles (EVs) and cryptocurrency.
What are Metaverse stocks?
Metaverse stocks are considered companies listed on the stock market that are focused on the development of the metaverse. A metaverse investment could involve stocks of public companies developing infrastructure for the metaverse, as well as those creating virtual worlds and pioneering content, commerce, and social experiences.
While most still confuse the metaverse with online gaming, brands and internet users are starting to get involved in this space, including many big-name brands, such as Nike. For instance, Nikeland exists in the metaverse to establish the brand’s digital presence in the space while also promoting its digital assets. But they’re not the only ones who rushed to the metaverse. Other big consumer brands have already established a metaverse presence.
Metaverse stocks are categorized into several groups:
- Hardware – Companies that sell and support consumer and enterprise hardware used to access, interact with or develop the metaverse.
- Compute – Companies that enable and supply computing power to support physics calculation, data reconciliation, and artificial intelligence, among others.
- Networking – Companies that provide, manage and transmit data.
- Virtual platforms – Companies developing and operating immersive three-dimensional simulations and worlds for consumers to interact with.
- Interchange standards – Companies that provide real-time connections, high bandwidth, and decentralized data transmission.
- Payments – Companies that provide digital payment processes, and fiat on-ramps to cryptocurrencies.
- Content, assets, and identity services – Companies that design, create, sell, store and manage digital assets such as NFTs and cryptocurrencies.
Investors may be interested in metaverse stocks to get in early on that metaverse-fueled growth and do so at a discounted price compared to what most of these stocks traded for last fall or even at the start of the year.
Since most metaverses are closely related to the blockchain and their economies use digital assets, investors looking to gain exposure to new technologies may also be interested in NFTs, and metaverse crypto coins.
Top metaverse stocks to watch
Here are eight metaverse stocks that are potentially positioned to be big winners in this next wave of technology, according to analysts. :
META Platforms (META)
Meta Platforms (META), formerly known as Facebook, is a company that pioneered virtual reality (VR) and social networking apps. The company also launched the Oculus VR headset as hardware to help users get the full immersive metaverse experience. The company owns a reality lab division that is responsible for the metaverse and virtual reality experiences. While the primary source of income comes from selling advertising space on their social platforms, the VR/AR business segment of Meta Platforms generated $2.2 billion in revenue for FY21. Meta may be able to leverage its existing audience to monetize the Metaverse beyond selling VR headsets. Meta Platforms' stock price performance shows that it has done exceptionally well since going public in 2012. This company's share value has increased by almost 60% in the past half-decade.
Roblox (RBLX) is an online game company, social network, and content creation platform. It's positioned as one of the leading companies in the virtual world of the metaverse. It achieved rapid success by listing at $41.9 billion and reaching a valuation of $45 billion a month later. The company is more than a gaming platform. Roblox metaverse has hosted 3D concerts for Hollywood stars like Lil Nas X and David Guetta. There have been more than 24 million 3D experiences available for Roblox users. In Q4 2021, Roblox saw 49 million users per day, which was an increase of 33% compared to 2020. Although the company has yet to make a profit, engagement hours are up by 35% year over year. This is encouraging news.
Nvidia (NVDA) is a semiconductor company that makes graphics processing units and fast-processing chips. It is a popular metaverse stock as its Nvidia chips are already integrated with Meta Platform's supercomputer, AI Research SuperCluster. This supercomputer is expected to play an important role in the development of technologies for the metaverse. Nvidia also has invested in 3D technology and has built a scalable, real-time reference development platform called Omniverse. Nvidia's GPUs are also highly sought-after for offering 3D content in the metaverse. Investors will be pleased to know that Nvidia has already seen impressive growth in the video gaming and big data sector. The company is heavily involved in behind-the-scenes operations and supports other companies that create virtual worlds or products for the metaverse. Nvidia stock has risen by 980% over the past five years.
Microsoft (MSFT) is a software giant. They are also ready to embark on their journey into the metaverse. Microsoft aims to create an enterprise metaverse that will basically be a virtual representation of all Microsoft tools. Microsoft Mesh is a virtual collaboration tool that allows real-time collaboration between people in the virtual world. Mesh will include a collection of pre-built immersive spaces that can be used for social mixers and meetings. This will allow users to interact with one another and create avatars. Microsoft plans to purchase the gaming giant Activision Blizzard, which will be a key part of the creation of its own metaverse. Microsoft, unlike many tech stocks, pays dividends. Microsoft's shares continue to perform well, with gains of more than 350% over the past five years.
Snap (SNAP) is a popular social media platform known as Snapchat. Some believe Snap is more advanced in developing the metaverse than Meta Platforms. These two social media giants will hold a large share of virtual social networking users. Snap's interface leads the race because it allows users to personalize their virtual appearance, creating 3D characters they can use for chatting. Snap is also working on AR (augmented reality) glasses that are much more trendy than other existing tech. You can use the gadget to relay digital images and data in real-life environments you can manipulate to fulfill your desired purpose. The Snap camera can be used to scan real-life objects, which will trigger an Amazon search for the product.
Apple (AAPL) has been playing the long game in the metaverse race. Apple officially adopted augmented reality in 2017 with the official release of its ARKit development tools. The company has been quietly working on AR headsets for many years and was reportedly presented to the board of directors earlier in 2017. It is believed that Apple will release its long-awaited AR headset in 2023. Apple will use its approximately 1.8 billion active devices worldwide to launch the AR headset and related services when that happens. Apple may be a major metaverse player.
Amazon (AMZN), the world's largest e-commerce company, has already created tech that allows you to visualize how furniture for your home would look. Amazon is expected to have a major influence on AR and VR experiences, with online commerce reaching its peak in the metaverse. Amazon is a leading company when it comes to cloud infrastructure. Amazon Web Services (AWS) currently holds 33% of the cloud infrastructure market. A large portion of the funds that will be used to host virtual worlds will go into AMZN's pockets. Amazon will also be using its e-commerce presence in the metaverse to maximize ad revenue opportunities and leverage its e-commerce presence.
Alternatively, investors can buy shares in metaverse-oriented exchange-traded funds (ETFs). Prospective shareholders should first understand and agree with how a fund selects investments for its portfolio. These ETFs invest in prominent metaverse-related companies with the hope of matching or outperforming benchmark indices.
Metaverse ETFs are a popular option for investors who want to gain portfolio exposure to the metaverse without having to research and choose individual stocks themselves.
You can find an ETF to suit any metaverse investment strategy you desire by using CAPEX.com WebTrader.
How to invest in metaverse stocks
There are two routes to investing in metaverse stocks: speculating on their prices using CFDs or buying the assets in the hope they increase in value.
Trading metaverse stocks using CFDs
A CFD is a contract in which you agree to exchange the difference in the price of a cryptocurrency from when you first open your position to when you close it. You are speculating on the price of the market rather than taking ownership of the metaverse stocks. If you open a long position and the cryptocurrency or stock or ETF does increase in value, you’ll make a profit, but if it falls in price, you’ll make a loss – the opposite is true for a short position.
Before you can start, you would need to open a CFD trading account.
Buying metaverse stocks
This means that you take ownership of a portion of the company outright, with the intention of holding it with a brokerage and profiting if it increases in value.
Before you can start, you would need to open an investing account with a broker like CAPEX.com.
Each investor should research the available ways to invest in the metaverse before deciding what’s the best option for their situation. Decide whether you want to buy stock or trade stocks. Remember that the metaverse and its assets are volatile assets, as it’s the case with crypto, and you shouldn’t invest more than you are willing to lose.
Some of the most popular metaverse investments are ETFs and stocks because these investments do not require investors to get involved in the metaverse space. Another advantage when investing in metaverse stocks is that you can also use U.S. Dollars instead of cryptocurrency.
Getting started with CAPEX.com
Here is how to invest in metaverse stocks with an international, highly regulated broker like CAPEX.com:
- Choose which type of account you want to use. Your first concern should be your risk appetite and time horizon. If you want to buy and hold metaverse stocks, open an investing account. If you want to speculate on price movements (including falling prices) with zero commission and leverage, open a CFD trading account.
- Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity.
- Fund your account with fiat money. Before buying and trading any metaverse stock, you need to fund your exchange account with U.S. dollars, Euros, or other currencies.
- Select your metaverse stocks. It’s time to decide on your first metaverse stock investment. We strongly recommend that you thoroughly research the public companies that are somehow invested in the metaverse. Alternatively, investors can buy shares in metaverse ETFs.
- Place a buy order for your chosen metaverse stock. Follow the steps required by the trading platform to submit and complete a buy order for one or more metaverse stocks.
When trading metaverse stocks, the CFDs (contracts for difference) are stored in your account and are far more liquid. However, you should be aware that CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading CFDs. There are liquidity risks and margins you need to maintain; if you cannot cover reductions in values, your provider may close your position, and you'll have to meet the loss no matter what subsequently happens to the underlying asset.
With CAPEX, you can trade CFDs on +2.000 stocks and invest in +5.000 stocks with ownership.
Pros and Cons
Before developing your investment plan, keep in mind that the metaverse is an emerging technology, and nobody can say if internet users will adopt this in the future. With that said, here are the pros and cons of investing in metaverse stocks.
Pros of investing in metaverse stocks
- Metaverse stocks, just like any other stock, can trade in fractions. Directly investing in any of the metaverse assets will not allow you to divide your investment.
- Metaverse stocks can be bought with fiat money, and no blockchain or cryptocurrency transaction is needed.
- Investors can make money from their metaverse stock investments and receive dividends based on the company's profits over time.
- Metaverse stocks belong to public companies that have a long history on the market. This can give you a predictable return on your investment. These well-established companies are listed on the major stock exchanges, and they provide access to financial and data analysis reports.
- Metaverse stocks can help investors diversify their investment portfolio across different industries and countries.
- Metaverse stocks are less volatile (than crypto or other related digital assets) as the companies offering them have various income sources and don’t rely entirely on this emerging technology.
- Investors can also choose to invest in metaverse ETFs, which provide exposure to a basket of stocks with interest in the metaverse.
Cons of investing in metaverse stocks
- The metaverse is an emergent technology, and any investment can result in a loss.
- The metaverse stocks' share prices can be extremely sensitive to industry news and developments.
- If the company has financial difficulties, the stock price may drop.
- If the company isn’t profitable, investors will not receive any dividends.
The metaverse is a trending word and has already started attracting many companies that want to link their names to this emerging technology. But only time will tell if all these companies will succeed and deliver tangible returns to shareholders.
Investors have a lot of opportunities as many tech companies are already researching and supporting the metaverse. Some have been experiencing significant drops in their stock price in 2022. Investors will have to research and decide which metaverse stocks will reap the greatest benefits in the long run.
Before you start investing and trading in metaverse stocks, you should consider using the educational resources we offer, like CAPEX Academy or a demo trading account. CAPEX Academy has lots of courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a better trader or make more-informed investment decisions.
Our demo account is a suitable place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for stock investors who are looking to make a transition to leveraged trading.
Why do people invest in metaverse stocks?
Metaverse stock investors want to be exposed to the metaverse technology and assets without having to buy any digital assets such as NFTs or cryptocurrency. Even if they wanted to get directly involved in the metaverse, investors would have to spend time learning how blockchain transactions work.
Is the metaverse a good investment?
Investing in emerging technologies, including the metaverse, is a gamble, and nobody can predict the evolution of the market. Many companies are experimenting in this space.
How can I invest in metaverse stocks?
Like any other stock, metaverse stocks don’t rely on blockchain technology. However, some metaverses are built on the blockchain while others are not. The entire space is interconnected, and companies that offer metaverse stocks can range in their products. Some metaverse companies may offer NFT collectibles, while others offer the infrastructure or hardware needed to support the virtual space. Luckily, you can access all the tools to trade and invest in metaverse tools using one single platform.