3 Metaverse Stocks to Buy Right Now
Investing in the metaverse has turned into a frenzy since Facebook -- that is to say, Meta Platforms (NASDAQ: FB) -- decided to go big on the digital world and start spending billions per year on its development. Not only are powerful new businesses likely to be created if the metaverse takes off, but even more companies could richly profit from the technology's construction in the decades ahead.
To that end, three Fool.com contributors have three metaverse stocks for you to consider right now: Unity Software (NYSE: U), Netflix (NASDAQ: NFLX), and Tencent (OTC: TCEHY). Here's why.
A "construction company" for the metaverse
But to get to that point, we'll need tools that make it super easy to build such worlds (as Shopify and Wix.com are doing for website creation today). One such suite of creativity tools could be from Unity Software. Unity's solutions for creating, running, and monetizing 3D content made its name in the video game industry, but it's expanded well beyond that -- picking up users in engineering, manufacturing, education, live sports, and more.
The sheer breadth of options available for Unity to expand are only limited by the imagination. Millions of creators around the world are already using Unity, and content built using the platform could be limitless if the metaverse turns out to be more than just a hot topic of the moment. But given the
Recent metaverse buzz and a stellar Q3 2021 earnings update (revenue of $286 million was up 43% year over year; Q4 guidance is calling for another 29% to 32% rise) has sent Unity stock on a tear as of late. Shares are up 24% year to date, with all of that upside coming since Facebook's
Clearly, investors are excited about Unity Software's metaverse potential. At an expected ratio of
Yet another great reason to own Netflix stock
I'm not talking about the basic Netflix app for the Oculus Quest headset. That's just another way to view the same Netflix titles you would see on your phone, tablet, computer, set-top box, and so on -- wrapped in a cozy 3D rendering of a living room somewhere in the Swiss Alps. It's an aging, clunky experience that is prone to sudden crashes, and it could really use a bug-fixing update someday soon.
We're not looking at the recent Squid Game title for Oculus, either. That's a fan-made game, attempting to replicate the "red light, green light" experience from the first episode of the namesake South Korean series. It isn't even available in the Oculus app store, but must be sideloaded from unofficial sources. Netflix took no part in developing that game, though
And the metaverse effort goes far beyond the Eden Unearthed game, though this one is a step in the right direction. Published for free in the Oculus App Lab portfolio as a project under development, this is a Netflix-backed game based on the Netflix original anime series Eden. Eden Unearthed isn't much of a game, but it offers intuitive controls and a dazzling virtual reality view of the show's fictional world.
So here's the real revelation. When Netflix hired its first head of video game operations four months ago, it went straight for the heart of the metaverse project. The company's vice president of game development is Mike Verdu, plucked right out of Facebook's augmented/virtual reality project two months before the official Meta Platforms name change. Verdu might know something about Meta's future metaverse plans, and he is now the driving force behind
Netflix is not known for pursuing a growth market halfheartedly. The streaming service launched worldwide while investors were expecting a series of baby steps with just a couple of new countries per mini-launch. When original content turned out to be a winning strategy, the company started pouring billions of dollars into film and show production -- which now dominates Hollywood's awards-show season.
And a couple of modest mobile games could be cool, but what if Netflix really wants to develop immersive and story-driven experiences inside the metaverse? Well, they've hired just the guy to move them in that direction.
So yes, I'm serious. Netflix should be a big winner in metaverse-based media content and
This tech giant has all the building blocks for the metaverse in hand
Chinese internet giant Tencent's two most profitable businesses today are -- you guessed it -- video games and social media, positioning it quite well to capitalize on any metaverse opportunity. Tencent is the country's largest game distributor across both mobile devices and personal computers (PCs). It owns a number of video game studios, including Epic Games, the company behind the immersive global hit Fortnite and the Unreal game engine platform, used by both Epic and other developers. Tencent is also the parent company of social network and "super-app" WeChat, which has more than 1.26 billion users and is central to many citizens' daily lives in China.
Meanwhile, the company's newest growth focus has been on what it calls "the industrial internet," which basically consists of cloud-based enterprise software applications that could one day also participate in the metaverse. In fact, on the recent
In a new twist, Tencent also just unveiled three proprietary
The company has leading positions in China across not just one but several potential metaverse use cases; a new interest in chip design; a history of innovation; and vast financial resources. When you consider all that, Tencent seems highly likely to be a formidable player in the metaverse, and potentially a global leader.
Meanwhile, the regulatory crackdown in China has given investors an opportunity to buy Tencent's stock at about 33% below all-time highs, even though Tencent is probably the
10 stocks we like better than Unity Software Inc.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors.
The Motley Fool owns shares of and recommends Meta Platforms, Netflix, Nvidia, Shopify, Tencent Holdings, Unity Software, and Wix.com. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a