The Metaverse is a digital realm that goes beyond our understanding of reality. In this three-dimensional universe, people immerse themselves in a virtual environment and network with others in the digital world. Technology has captured the imagination of many tech companies striving to make the metaverse a reality.
Investing in Metaverse stocks requires patience. It could be years before the development unfolds its full potential. According to McKinsey, the metaverse has the potential to be worth $5 trillion by 2030. Citigroup reckons the opportunity could be worth a staggering $13 trillion in the same year.
There are companies making strides in this area that could be at the forefront of the Metaverse’s tremendous opportunities. Here are three stocks to buy today to capitalize on this industry’s tremendous potential.
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1. Metaplatforms
metaplatforms (META 1.40%) became heavily involved with the metaverse and rebranded his company from Facebook two years ago. It has poured billions of dollars into chasing the Metaverse through its Reality Labs segment.
The Company offers its Meta Quest virtual reality devices and software, as well as Metaverse-related content, through the Meta Quest Store. It provides people with a platform for virtual experiences, from gaming to fitness to entertainment.
The Reality Labs segment has been working on exciting technologies, but has been a significant detractor from Meta’s earnings. Last year, the segment lost $14 billion and another $4 billion in the first quarter.
An investment in the metaverse requires significant capital investment and may not be profitable for several years. However, Meta’s family of apps, including Facebook, Instagram, and WhatsApp, generate significant cash flow. Last year, these segments made $43 billion in profit, adding another $11 billion in the first quarter.
Meta Platforms aims to make significant investments in the Metaversum, and its other companies ensure that can continue to be the case — making it a solid Metaversum stock to buy today.
2. Unity Software
Unity software (U -4.48%) provides developers with a platform for building 3D development tools that enable them to create interactive 3D, augmented and virtual reality experiences. It expects to play a major role in expanding Metaverse content for years to come. The company estimates that half of the world’s mobile, console and PC games are made with its game development engine.
It offers content creators who are just starting out two products for free: Unity Personal and Unity Student. The company generates revenue through subscriptions to its platform, support and services, and connects advertisers with creators to monetize their content.
Last year, Unity’s $1.4 billion in revenue grew 25% year over year. However, the company struggled to turn a profit, losing $919 million over the year. In the first quarter, revenue rose 56% year over year, but its net loss climbed to $254 million.
Unity is in growth mode, posting losses as it faces short-term headwinds. The stock has a bright future as a major player in the metaverse and offers an attractive investment opportunity for those with a long time horizon. Its high valuation and lack of earnings makes it best suited for investors willing to wait out the near-term growth difficulties for potentially excellent long-term returns.
3. Apple
The last Metaverse stock to buy is Apple (AAPL 0.67%). Analysts expect Apple to unveil its virtual reality headset during its global developer conference starting June 5. If that’s the case, this product would be a massive step for Apple to add to its already impressive lineup.
According to Gizmodo, Apple’s VR headset would differ greatly from other offerings on the market today in terms of functionality, available apps, and price. The device would use mixed reality or a combination of augmented and virtual reality and should cost around $3,000. The move would be significant for Apple, which is already a giant with a market cap of $2.7 trillion.
Like Meta, Apple has several other highly profitable businesses that provide excellent cash flow and allow the company to invest in VR and related app development. Apple is already a stellar company, and its potential role in shaping the metaverse with its products is another reason the stock is worth buying and holding for the long term.
Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Courtney Carlsen holds positions at Apple. The Motley Fool has positions in and recommends Apple, Meta Platforms, and Unity Software. The Motley Fool has a disclosure policy.
