2 Top Metaverse Stocks That Could Make You Rich By Retirement

The metaverse is now considered to be the next big trend in the technology sector. Broadly speaking, the concept of a metaverse involves creating immersive experiences for users in virtual reality worlds or in some combination of physical and virtual worlds using…

technologies such as video, virtual reality (VR), and augmented reality (AR).

We are seeing many technology giants as well as newcomers racing to grab a share of this potentially huge market estimated to be worth $800 billion by 2024. Prominent among the early players is Meta Platforms (NASDAQ:FB), previously known as Facebook. The name change is a part of the rebranding exercise and highlights Meta’s commitment to this opportunity.

But there are also several other companies such as Unity Software (NYSE:U) and Cloudflare (NYSE:NET) that have the potential to leverage the metaverse and change the way people live, work, and entertain themselves. Since the concept of the metaverse may take some time for meaningful monetization, these companies provide a margin of safety to investors with their other revenue-earning business lines. Here’s why these stocks are a relatively safe way for retail investors to get exposure to evolving metaverse trends.

1. Unity Software

Unity Software’s content development platform enables developers to create a range of immersive and interactive 2D and 3D platform-agnostic games. The company’s game engine is used to develop over 70% of the top mobile games and by 94 of the leading 100 game studios in the world. Additionally, Unity Software also powers other immersive 3D experiences in a range of industrial and commercial use cases such as training, robotics, and simulation.

Currently, only 2% of the global content is developed with real-time 3D. However, almost half of this 3D content is developed using Unity’s platform. The company expects real-time 3D to account for 50% of the global content in the next 10 years. Thanks to its leadership in providing easy-to-use high-performance tools to developers for creating unique real-time 3D experiences and in engaging with the user base to monetize these experiences, Unity expects to emerge as a key player in the metaverse market.

Unity’s proposed acquisition of leading visual effects (VFX) tools and technology player Weta Digital highlights the company’s commitment toward the metaverse. After the completion of the deal, Unity can reach out to a broad base of artists with Weta’s industry-leading tools and an extensive content library composed of thousands of digital art assets. This move is important, considering that artists will account for a major chunk of people creating the metaverse. The acquisition is expected to expand Unity’s total addressable market by an additional $10 billion.

While the metaverse is undeniably an exciting future opportunity, gaming will continue to be the main revenue source for Unity for coming years. In the third quarter (ending Sept. 30, 2021), the company’s revenues were up 43% year over year to $286.3 million. Unity has also demonstrated robust success in cross-selling, as evident by its second-quarter dollar-based net expansion rate of 142% (implying that existing customers spent 42% more compared to the same quarter of the previous year). The company is not yet…

 

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