The Motley Fool has positions in and recommends Meta Platforms. Companies have an obligation to shareholders when it comes to profits. If they don’t have any good uses for excess cash, it should be returned to shareholders via dividends or share repurchases. However, if companies can create more than a dollar’s worth of shareholder value for every excess dollar they keep, then that’s the more favorable option for long-term investors. Clearly, Meta Platforms isn’t pivoting whatsoever from its investment in the metaverse.

Two months later, Bloomberg projected that the metaverse could be a nearly $800 billion market opportunity. At the start of April, Citi released a report that projects the addressable market for the metaverse will reach between $8 trillion and $13 trillion by 2030. This $13.7 billion is in addition to an operating loss of $10.2 billion for Reality Labs in 2021, adding up to a two-year operating loss of $23.9 billion. And during this time frame, Meta Platforms has generated metaverse-related revenue of just $4.4 billion.

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The massive IPO valuation earned Facebook a spot in the S&P 500 in the first year of its public life. Although its valuation has deteriorated in the wake of scandal and consumer trends within social media, early investors were treated to gains in excess of 1000% at the peak of the stock run. Mark Zuckerburg retained 22% ownership in the company following the IPO, and 57% of the voting rights. As of 2022, those holdings were down to about 14% of the company and 54% of the voting rights. Its Omniverse Enterprise product has only been generally available since late 2021, but it’s already being considered by hundreds of companies and downloaded by tens of thousands of content creators.

• Since then, the company has embarked on a sweeping internal transformation, restructuring itself and pushing employees to join teams working on augmented reality and virtual reality.
• Investors are skeptical because, at least so far, consumers aren’t exactly flocking to the fledgling metaverse.
• And during this time frame, Meta Platforms has generated metaverse-related revenue of just $4.4 billion.
• The company’s average rating score is 2.69, and is based on 36 buy ratings, 8 hold ratings, and 4 sell ratings.
• The hit to Meta has also whittled down Zuckerberg’s personal fortune, since most of his wealth stems from his 13% stake in the social media company.
• But its ad revenue fell in the most recent quarter, with sales drooping 3.7% and adding to investor concerns.

As the platform grows and evolves, you can expect continued interest from both businesses and individual investors alike. Additionally, the financials point to Unity’s rising popularity. In the first nine months of 2021, it reported $795 million in revenue, 44% more than the same period in 2020. However, investors began selling Unity stock following the Weta acquisition announcement, most likely because of the $1.5 billion in convertible notes sold to fund the deal. Now, Unity stock has fallen by almost 40% since the Weta announcement.

Reasons to Be Long Tech (Unexpected)

Plus, AAPL has been stealthily working on an AR headset for years, and it was reportedly demonstrated to the company’s board of directors earlier this year. The company is determined to lay claim to the metaverse and has big plans for monetizing the digital world. It is, even though the company’s CEO has been openly dismissive of the metaverse – at least the metaverse as envisioned by Mark Zuckerberg. In other words, the metaverse is on track to dwarf other high-profile technology trends including electric vehicles , autonomous vehicles and cryptocurrency.

Meta Platforms has a short interest ratio (“days to cover”) of 0.8, which is generally considered an acceptable ratio of short interest to trading volume. According to analysts’ consensus price target of $203.85, Meta Platforms has a forecasted upside of 12.7% from its current price of $180.90. Meta also announced plans to change its stock ticker so that its shares would trade under the symbol META on the Nasdaq exchange instead of FB. In the call, Mr. Zuckerberg also pointed to the difficulties of competing with TikTok, which has grown increasingly popular with younger audiences.

Roundhill Ball Metaverse ETF

It’s important to note, however, that the metaverse is still in its infancy and its value proposition has yet to be proven. Any investment in the metaverse should be considered speculative and highly risky. And with MSFT shares down almost 17% for the year-to-date, it seems like an attractive how to invest in metaverse time to scoop up the stock at a relative bargain. Microsoft was also a pioneer in AR headset development with the HoloLens – which landed the company a deal with the U.S. Except, the head of the HoloLens division resigned earlier this year amid accusations of inappropriate behavior.

Therefore, the Metaverse market is expected to grow rapidly, so investors can benefit from Metaverse stocks. Even though each feature shows extreme promise, the most exciting part is the IBAT Battle Arena, a metaverse world that has been meticulously crafted. It is very important to make sure that you research the market thoroughly before investing in anything, whether you are looking to buy stocks or wondering how to invest in the Metaverse. As opposed to most software platforms in the market, the Metaverse is not something that can be viewed as a singular entity, as seen with a typical software platform. There are different ways to interact with the Metaverse in real-time, which can be defined as a digital, three-dimensional world. It allows many people to carry out social interactions, commerce, and much more.

The type of token or coin that will be needed to execute the transaction varies by metaverse platform. For instance, to purchase digital land in Decentraland, the user would need to purchase MANA tokens. If he wished to purchase land in The Sandbox, he would need to acquire SAND tokens.

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Regarding efficiency, management hopes to save money in other parts of the business, in part by continuing to invest in artificial intelligence to improve operations. In 2022, Meta Platforms’ Reality Labs generated almost $2.2 billion in full-year revenue, making it one of the biggest metaverse players in the world. However, this segment generated an operating loss of $13.7 billion, meaning the company is spending way more money than it’s making. The positive price action is primarily due to increasing interest in blockchain technology and institutional investors’ growing adoption of cryptocurrency assets.

There are future plans to modify the AXS token so that it can be used to purchase digital goods and services on Axie Infinity. Decentraland – With a market cap of about $6 billion at the time of writing, Decentraland’s MANA token powers the Decentraland metaverse and is used as a medium of exchange on the platform’s marketplace. Below are metaverse tokens listed in descending order by size of market capitalization . These options are inherently risky and should be considered a speculative investment. As a general rule, it’s advisable to never invest more than you are willing to lose.

The company was founded by Mark Elliot Zuckerberg, Dustin Moskovitz, Chris R. Hughes, Andrew McCollum, and Eduardo P. Saverin on February 4, 2004, and is headquartered in Menlo Park, CA. Nvidia stock is one I view as a more indirect way to play a potential bull market rally among metaverse stocks. A generally agreed-upon definition of the concept is a digital experience that blends virtual reality, streaming video, mobile games like Roblox Inc. RBLX, +4.13%and “Fortnite,” cryptocurrencies, social media, 5G, artificial intelligence and email. In short, a Sargasso Sea of tech buzzwords that approximates a digital facsimile of how we live in the physical world. Runs a metaverse gaming platform that allows users to construct and participate in games simultaneously.

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The company quickly grew and expanded into other universities and then opened itself to the public in 2006. As of 2006, anyone over the age of 13 can be a Facebook user which is the company’s primary source of income. https://xcritical.com/ As of 2022, the company claimed more than 2.9 billion monthly active Facebook users. Short interest in Meta Platforms has recently decreased by 10.26%, indicating that investor sentiment is improving significantly.

The Sandbox – The Sandbox is focused on a metaverse of user-generated content, much like Roblox. The SAND token is awarded to individuals who participate in The Sandbox’s alpha user testing. Owners of SAND can use it to purchase digital goods and services, vote on proposed initiatives within The Sandbox and stake their SAND to earn further rewards. Metaverse land and crypto are just some of the ways future tech enthusiasts can invest in the next digital frontier.

The Factors That Could Impact the Stock Price

It’s also reasonable to believe the company can keep taking market share from competitors due to its unique value proposition. Two of its products — Unity Personal and Unity Student — are offered free to content creators who are just starting out. As these creators succeed, it’s likely they will become paying Unity customers. The metaverse is defined as a digital, three-dimensional world that’s immersive and accessible in real time by an unlimited number of people, allowing for social interactions, commerce, and more.

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Other important factors include market sentiment, which can be driven by a variety of news events and influences, and company performance. If a company is reporting strong financial results or positive news about its products or services, it can increase its stock price. Conversely, if a company is facing challenges or negative publicity, this can cause its stock price to decline. Among the main limitations of Roblox, there are its weak graphics engine and the fact that most of its users are kids or teenagers. In addition, many investors are skeptical about Roblox’s long-term value if it cannot expand to a larger audience. Nevertheless, Roblox has a large, engaged community and should benefit from the Metaverse.

Meta’s spending is unlikely to subside anytime soon, especially as it is in a full-throttled race against other technology giants to claim ground in the theoretical metaverse. Google has been working on metaverse-related technology for years, and Apple has its own devices in the works. At the same time, Meta said its social networking businesses — such as Facebook and Instagram — were being buffeted by another shift made by a rival tech giant. The move has affected social networking companies because it has given them less data to use for serving people targeted ads. Meta said the changes would cost it about $10 billion in ad revenue this year. Patience is needed because the metaverse could take a decade or more to develop.

The term today refers to a variety of experiences, environments and assets that exist in the virtual space. An attendee at a Facebook conference in 2019 trying out the Oculus, now Meta, Quest virtual reality headset. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Alphabet, Avalanche, Cloudflare, Meta Platforms, Nvidia, Roblox, Solana, and Unity Software. Unlike stocks, ETFs are subject to ongoing fees, and the Roundhill Ball Metaverse ETF is no exception.

This company produces graphics and video processing chips for artificial intelligence and high-end computing. It’s an investor favorite, and now it’s playing a massive role in powering the metaverse. I think the company’s recent stock price decline was probably warranted.