While excitement surrounding the emergence of the metaverse has seen plenty of investor interest grow throughout 2022, recent market downturns have heavily impacted the performance of stocks. Now, as a new year of more innovations and hopes of greater fiscal control loom, it may be worth investors taking a fresh look at some of the key players of the metaverse.
The metaverse itself promises to disrupt a vast array of industries that stem far beyond the realms of today’s market leaders. This is likely to open up new and unconventional opportunities for investors seeking emerging trends.
However, in the wake of the financial downturns of 2022 caused by factors like Covid-19, Russia’s invasion of Ukraine and sweeping stock market corrections, many key players in the metaverse have shed much of their stock value throughout the year–which may hold appeal as a discounted buy option.
With this in mind, let’s take a deeper look at five metaverse stocks that may be heading for a more prosperous 2023 as Web3 continues its growth:
1. Meta (META)
One of the most logical places to start our exploration of long-term metaverse stock options is with Meta (Meta). The artist formerly known as Facebook is arguably the company that’s betting the most on a future intertwined with the metaverse.
Meta Platforms has gambled so heavily on its future involvement in the metaverse that today the stock has suffered, with one shareholder recently calling for the company to shed its spending on the sector to ‘get its mojo back.’
CEO Mark Zuckerberg’s vision for Meta and the metaverse is unwavering, however, and he recently talked of how the metaverse will play a major role in the company’s success in the late 2020s.
We may begin seeing Meta’s stock, which currently sits some 65% adrift from its 2021 all-time high, recover sooner–with the platform’s highly anticipated Horizon Worlds platform set to undergo major enterprise adoption next year.
Furthermore, Meta spent some $10 billion in growing its Reality Labs technology recently, with VR glasses, smart glasses and a collection of other advanced products that could bolster the company’s profile.
Although Meta has struggled in 2022, a smooth start to 2023 could pave the way for a memorable year for the tech giants.
2. Nvidia Corp. (NVDA)
While some companies have positioned themselves at the forefront of the metaverse, others, like Nvidia (NVDA), play an integral role away from the limelight.
The reason why Nvidia is an essential stock in relation to the metaverse is that it’s currently the company that’s most likely to power Web3 through its suite of computer chips. As the most valuable semiconductor company in the world, Nvidia stands as the company best positioned to turn the metaverse visions of tomorrow into a reality.
Furthermore, the company’s CEO Jensen Huang has identified a litany of B2B opportunities that Nvidia could deliver for firms around the world–not least in the simulation of large-scale infrastructure projects through 3D collaboration platforms.
3. Cloudflare (NET)
Cloudflare (NET) is a content delivery network (CDN) that’s well-positioned to bring the required speeds to the metaverse as the landscape continues to emerge. According to the company itself, its network can deliver content in 50 milliseconds–a speed that Cloudflare believes can make a reality for around 95% of the world’s population.
Connection speeds are essential when it comes to the sheer volume of data that the metaverse will generate for users as they navigate vast digital spaces and interact with countless virtual elements.
Importantly, Cloudflare also offers cybersecurity options which could become essential as companies and users look to deal with new forms of threats online.
With the stock 73% adrift from its 2021 peak today, there’s certainly room for growth for Cloudflare, and it could represent a strong pickup for investors who believe in the role that the platform could play in the emergence of the metaverse.
4. Microsoft (MSFT)
As a company that’s built a reputation for sustainable growth and innovation, it’s unsurprising to see Microsoft (MSFT) performing admirably on the stock market when considering the widespread tech industry downturns.
Although the tech giants are rarely mentioned at the forefront of metaverse-facing companies, MSFT has been a shrewd player in ramping up preparations for Web3.
At the beginning of the year, Microsoft acquired Activision Blizzard in a $70 billion deal that secured access to the gaming leader’s key titles like Call of Duty and the firm’s market of 390 million monthly users.
With Microsoft identifying the potential that the metaverse holds for the gaming industry, the stock could be one of the first to reap the rewards of the emergence of the new technological landscape.
5. Match Group (MTCH)
Match Group (MTCH) could be another stock that’s set to reap the long-term rewards of the metaverse. The dating industry leader is the parent company of Tinder and Match.com, and stands to benefit significantly from its dominant position as the metaverse opens the door to brand new ways for individuals to meet and find love.
The company went public at the beginning of the 2020-2021 tech boom, which has made subsequent losses of 74% from its peak appear more aggressive than other tech-facing firms. Furthermore, a high price-earnings ratio makes the stock one of the riskier options listed. Despite this, Match’s position as a market leader means that it’s the most likely to reap the rewards of an emerging new digital landscape for online dating ahead of its competitors.
For more ambitious investors, recent market downturns have presented a range of opportunities to grow portfolios ahead of an expected long-term recovery.
With the metaverse long identified as a key component of Web3 and the next iteration of the internet, these tech stocks may have greater potential to recover faster than others that have been adversely impacted by 2022’s financial downturns.
However, it’s also worth noting that 2022 has served as a timely reminder of the many risks that can impact the market, and every stock should be thoroughly researched prior to purchase.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.