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In this article, we will be taking a look at the 11 best metaverse stocks to buy. To skip our detailed analysis of these stocks and the rise of the metaverse, you can go directly to see the 5 Best Metaverse Stocks to Buy.
With the rise of the Internet, many other new developments have come to the forefront. This includes the rise of the metaverse, which is a hypothetical iteration of the Internet as a single, universal, and immersive virtual world. Such a world includes the use of virtual reality and augmented reality technology, to facilitate its growth and development. Slowly but surely, the metaverse has developed itself into an industry in its own right, offering investors a lucrative investment opportunity in the market. According to a US Global Investors report published in December 2021, Grayscale Investments estimates that the metaverse offers a $1 trillion revenue opportunity as it was then.
Stocks such as Meta Platforms, Inc. (NASDAQ:META), NVIDIA Corporation (NASDAQ:NVDA), and Roblox Corporation (NYSE:RBLX) have swiftly begun joining the ranks of the metaverse.
According to a Deloitte report, the share price of Microsoft Corporation (NASDAQ:MSFT) rose in the first quarter of 2022 after it announced its metaverse business and saw a breakthrough in its cloud business. Major Chinese companies such as Alibaba Group Holding Limited (NYSE:BABA) and Baidu, Inc. (NASDAQ:BIDU) are also announcing ambitious bets on the metaverse industry.
Pixabay/Public Domain
Our Methodology
We analyzed the tech industry and picked 11 companies that are investing in the metaverse sector. These companies are expected to benefit from the explosive growth in the metaverse industry in the near future. These stocks have long-term growth catalysts and positive ratings from the Wall Street. They are also popular among the 895 hedge funds tracked by Insider Monkey as of the end of the June quarter.
Best Metaverse Stocks to Buy
11. Matterport, Inc. (NASDAQ:MTTR)
Number of Hedge Fund Holders: 7
Matterport, Inc. (NASDAQ:MTTR) is a spatial data company focusing on the digitization of the built world. The company offers a 3D data platform under the name Matterport digital twins, to enable the design, building, operation, promotion, and comprehension of spaces. This program is among the most prominent metaverse and real-world concepts implemented by companies today.
On August 16, Gal Munda at Wolfe Research initiated coverage of Matterport, Inc. (NASDAQ:MTTR) shares with a Peer Perform rating.
Seven hedge funds were long Matterport, Inc. (NASDAQ:MTTR) in the second quarter, with a total stake value of $22.6 million. In comparison, 12 hedge funds were long the stock in the previous quarter, with a total stake value of $52.6 million.
Miller Value Partners, an investment management firm, mentioned Matterport, Inc. (NASDAQ:MTTR) in its fourth-quarter 2021 investor letter. Here's what the firm said:
“Matterport Inc. (MTTR) continued to be a strong contributor during the quarter after Matterport’s ability to contribute to the building of the metaverse was brought to light. The company reported 3Q results that missed consensus due to unexpected supply constraints and labor shortage in its capture services. The company reported total sales of $27.7M below consensus of $29.1M but with gross profit beating coming in at $15.2M versus $15.1M expected leading to an EPS loss of -$0.06 slightly better than consensus of -$0.07. The company lowered full-year revenue guidance to $107-110M down from $120-126M previously while also lowering FY22 topline guidance to 50% growth from 65% at the time of the PIPE transaction due to continuing supply constraints and labor shortage.”
Matterport, Inc. (NASDAQ:MTTR), like Meta Platforms, Inc. (NASDAQ:META), NVIDIA Corporation (NASDAQ:NVDA), and Roblox Corporation (NYSE:RBLX), is among the top metaverse stocks hedge funds are piling into today.
10. Unity Software Inc. (NYSE:U)
Number of Hedge Fund Holders: 23
Unity Software Inc. (NYSE:U) is an information technology company working to create and operate an interactive real-time 3D content platform. The company's platform provides software solutions to create, run, and monetize interactive, real-time 2D and 3D content, making it a pure metaverse play in the market. It serves content creators and developers, alongside artists, designers, engineers, and architects.
Bernie McTernan at Needham initiated coverage of shares of Unity Software Inc. (NYSE:U) on October 7 with a Buy rating. The analyst also placed a $50 price target on the stock.
This August, Unity Software Inc. (NYSE:U) forecasted its third-quarter revenue growing from the year-ago figure. It reported a revenue forecast range of $315 million-$335 million, representing an expected increase in third-quarter revenue of 22%, in comparison to the previous figure of $273.6 million reported in the third quarter of 2021. The company also commented that it was prepared for and committed to its acquisition of ironSource, worth about $4.4 billion. In the second quarter of 2022, Unity Software Inc. (NYSE:U) had an EPS of -$0.18, beating estimates by $0.03.
There were 23 hedge funds long Unity Software Inc. (NYSE:U) in the second quarter with a total stake value of $1.9 billion.
9. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 38
Roblox Corporation (NYSE:RBLX) is a developer and operator of an online entertainment platform, based in San Mateo, California. The company offers Roblox Studio, a free toolset enabling developers and creators to build, publish, and operate 3D experiences and other content. The company also offers Roblox Client, an application allowing its users to explore the 3D digital world, among more. Since it offers a virtual world independent of virtual reality or augmented reality technology, it is considered to be one of the top stocks for early entry into the metaverse.
Stifel's Drew Crum holds a Buy rating on Roblox Corporation (NYSE:RBLX) shares as of October 19. The analyst also placed a $48 price target on the stock.
This October, analysts at Needham raised their bookings and adjusted EBITDA estimates on Roblox Corporation (NYSE:RBLX) in light of the company's September data, leading to its shares skyrocketing. The company's September data showed bookings between $212 million and $219 million, and a 23% year-over-year rise in its daily active users, bringing the number of these users up to 57.8 million. Analyst Bernie McTernan at Needham consequently raised his adjusted EBITDA estimates on Roblox Corporation (NYSE:RBLX) for the third and fourth quarters by 6% and 12% in light of these results, while also boosting bookings estimates for the fourth quarter to $852 million, up from the previous estimate of $824 million.
Catherine Wood's ARK Investment Management was the largest stakeholder in Roblox Corporation (NYSE:RBLX) in the second quarter, holding 8.5 million shares worth $303.7 million. In total, 38 hedge funds were long the stock, with a total stake value of $1.4 billion.
8. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 53
Autodesk, Inc. (NASDAQ:ADSK) is an application software company that provides 3D design, engineering, and entertainment software and services across the globe. The company provides AutoCAD Civil 3D, which is a surveying, design, analysis, and documentation solution for civil engineering. It is also partnering with Epic Games to prepare its design software for the metaverse.
A Buy rating was reiterated on shares of Autodesk, Inc. (NASDAQ:ADSK) by analyst Gregg Moskowitz at Mizuho on September 29. The analyst also placed a $240 price target on the stock.
This September, Autodesk, Inc. (NASDAQ:ADSK) was named one of the best above-consensus stocks by Credit Suisse's Product Manager, Andrew St. Pierre. In August, shares of Autodesk, Inc. (NASDAQ:ADSK) also gained by 9% after the company reported its second-quarter results and raised its full-year forecast for adjusted earnings. The company's adjusted EPS forecast now stands at $6.52-$6.71, while the consensus is $6.59. The previous adjusted EPS forecast offered by the company was $6.43-6.66.
Our hedge fund data shows 53 hedge funds long Autodesk, Inc. (NASDAQ:ADSK) in the second quarter and 50 hedge funds long the stock in the previous quarter. Their total stake values were $1.4 billion and $1.9 billion, respectively.
Aristotle Capital Management, LLC, an investment management company, mentioned Autodesk, Inc. (NASDAQ:ADSK) in its second-quarter 2022 investor letter. Here's what the firm said:
“Headquartered in Northern California and founded in 1982, Autodesk, Inc. (NASDAQ:ADSK) produces software that allows companies to design and model their products and/or projects. The company is the global industry standard for computer-aided design in the architecture, engineering and construction industry (AEC). Autodesk’s millions of subscribers rely on its software to design and model buildings, manufactured products, animated films and video games. The company’s four segments are AEC (44% of net sales), its iconic software AutoCAD (29%), Manufacturing (21%), and Media and Entertainment (M&E) (6%).
Autodesk primarily sells its software on a subscription basis, having discontinued perpetual license sales of most standalone products in 2016. As part of the move to subscription licensing, Autodesk replaced its product suite with three streamlined “Industry Collections” focused on AEC, Manufacturing and M&E.
In recent years, the AEC industry has increasingly sought to resolve the inefficiencies that arise when many parties are needed to complete a building project. Autodesk has been at the cutting edge of enabling improvement through innovation and promoting the use of open standards, or open building information modeling (BIM), which allows for all relevant building data to be processed virtually in a 3D model and shared across stakeholders. Importantly, Autodesk’s leadership in ensuring the interoperability of its software with that of competitors increases collaboration and productivity among architects, engineers and contractors – an attractive value proposition for its customers…” (Click here to read the full text)
7. Match Group, Inc. (NASDAQ:MTCH)
Number of Hedge Fund Holders: 54
Match Group, Inc. (NASDAQ:MTCH) is an interactive media and services company that provides dating products across the globe. Last year, the company announced its plans to join the metaverse with launch discussions for a live virtual world called "Single Town" where singles could interact through their avatars, though the project is yet to expand. Its portfolio of brands includes Tinder, Match, Meetic, OkCupid, Hinge, Pairs, PlentyOfFish, and OurTime, alongside several other brands as well.
Cory Carpenter, an analyst at JPMorgan, holds an Overweight rating on shares of Match Group, Inc. (NASDAQ:MTCH) as of October 4. The analyst also placed a $75 price target on the stock.
In the second quarter of 2022, Match Group, Inc. (NASDAQ:MTCH) had an EPS of $0.69, beating estimates by $0.07. This July, Match Group, Inc. (NASDAQ:MTCH) also acquired the dating app "The League".
Match Group, Inc. (NASDAQ:MTCH) was found among the 13F holdings of 54 hedge funds in the second quarter. Their total stake value was $847 million.
6. QUALCOMM, Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 71
QUALCOMM, Incorporated (NASDAQ:QCOM), an information technology company, has been heavily investing in the metaverse for over a decade. The company has a $100 million Snapdragon Metaverse Fund, and its Snapdragon XR1 and XR2 platforms seek to meet the demands of virtual and augmented reality devices. It also partnered with Meta Platforms this September to work on spatial computing powered by Snapdragon extended reality (XR) platforms and technologies.
Frank Lee, an analyst at HSBC, initiated coverage of QUALCOMM, Incorporated (NASDAQ:QCOM) shares on October 24 with a Buy rating and a $180 price target. Frank Lee commented that QUALCOMM, Incorporated (NASDAQ:QCOM) was well-positioned for growth in the coming years. The company declared a $0.75 per share quarterly dividend in the same month, and has raised its payout for the past 18 years in a row. As such, the stock is a fair income investing play as well.
QUALCOMM, Incorporated (NASDAQ:QCOM) had 71 hedge funds long its stock in the second quarter, with a total stake value of $2.8 billion. Bailard Inc was the largest stakeholder in the company, holding 159,063 shares worth $17.9 million.
QUALCOMM, Incorporated (NASDAQ:QCOM), like Meta Platforms, Inc. (NASDAQ:META), NVIDIA Corporation (NASDAQ:NVDA), and Roblox Corporation (NYSE:RBLX), is one of the metaverse stocks many elite hedge funds are vying after this year.
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Disclosure: None. 11 Best Metaverse Stocks to Buy is originally published on Insider Monkey.
