Metaverse stocks are becoming extremely popular among investors as a way to profit from the upcoming web 3.0 revolution as we transition from social media to the virtual reality era.
Table of Contents
- The Bullish Case for Metaverse Stocks
- Why Invest in Metaverse Companies?
- Top Metaverse Stocks
- How to Invest in Metaverse Stocks
The Bullish Case for Metaverse Stocks
The Metaverse will change the way we use the internet as higher download speeds allow users to connect in the virtual world. While web 2.0 led to the rise of social media platforms, I believe web 3.0 will allow people to connect in the “virtual world” through augmented reality, games, and virtual technology.
Meta Platforms made an extremely bullish move by changing its name from Facebook to Meta Platforms and Meta CEO Mark Zuckerberg posted an hour-long video explaining the Metaverse in-depth. You can watch this video below:
New metaverse technologies will drive a brand new web 3.0 economy and I expect many companies will benefit from millions of users joining the virtual world. In a post-COVID-19 world, many consumers will embrace the social distancing measures of the metaverse and find it a bit safer than connecting to people in large groups.
Why Invest in Metaverse Companies?
- Meta CEO Mark Zuckerberg led the web 2.0 innovation with social media and I think it’s worth noting his investment in the metaverse
- Metaverse companies can provide amazing 100x returns as more people gather in the virtual world to interact, shop, play, and spend money.
- Web 2.0 helped several companies reach massive valuations and the metaverse movement will do the same for a new set of winners.
Top Metaverse Stocks
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Meta is one of the best-positioned companies to benefit from the web 3.0 metaverse due to its massive 2+ billion users across its vast network of social media apps. I wrote an article on SeekingAlpha discussing how Meta needs to pivot to the metaverse due to slowing DAU growth and competition from Tiktok and Truth Social.
Meta Reality Labs lost $10 billion in 2021 and I expect losses to increase as Meta ramps up its investment in the Metaverse. The company must pivot to web 3.0 because DAU growth has slowed and Tiktok is the top social media platform in 2022.
However, Meta CEO Mark Zuckerberg probably knows more about social media than any other CEO on Wall Street and this move will position Meta as a clear leader once web 3.0 becomes mainstream.
The problem is the Metaverse won’t take off for several years and Meta shares are a risky bet at these current price levels. If you’re looking for a solid future Metaverse stock then FB shares are a good multi-year hold. Be prepared for downside risks in the short term as we transition from web 2.0 to web 3.0.
Matterport helps companies create 3D models of real-life environments to better serve customers and clients in the Metaverse. The company aims to digitize all aspects of reality as companies race to provide a web 3.0 friendly user experience.
How to Invest in Metaverse Stocks
Here’s how to buy shares in any publicly traded company that will benefit directly from the growth of the metaverse:
Step 1: Find a metaverse related company
You can use the list of metaverse stocks we listed above as a good starting point. Targetting companies that will invest in virtual reality growth is usually the best start.
If you want to invest in the metaverse in general then try a metaverse ETF instead.
Step 2: Analyze the company
Some of the key things I look for in metaverse stocks are:
- Revenue Growth
- Good Price to Sales Ratio
- Future growth potential in regards to the metaverse
Step 3: Buy the stock
You can purchase metaverse stocks through any broker or stock trading app. Here are a few of my favorite stock trading apps below:
Fidelity Investments is my preferred full service broker for buying and selling stocks in a traditional brokerage account and IRA retirement account. $0 stock trades, 24/7 phone customer support, and an easy to use app are just some of the reasons why I use Fidelity.
Disclosure: I own zero positions in any of the stocks mentioned in this article.