The COVID-19 pandemic has caused major social change and made life dependent on the digital world. The pandemic has taught people to work, study and shop remotely, order food and other essentials online, go in contactless and limit themselves to indoor entertainment such as video games.
The virtual world, or metaverse, which reaches millions globally for business, communication, learning, entertainment and more, has gradually taken over the present and the future.
A metaverse Future with massively increased power
Metaverse is the latest development in the field of digitization. At its core, the metaverse is a collaborative and participatory virtual universe. The Metaverse includes virtual reality, which is characterized by constant virtual environments that exist even when not playing, and augmented reality, which blends elements of the digital and real worlds.
Experts believe that the universe’s metaverse journey has already begun and holds immense potential for the future.
According to a recent report from management consulting firm McKinsey, business and business use cases of metaverse are projected to generate $4-$5 trillion by 2030. Another report from market research firm BlueWeave Consulting shows that the global metaverse market is worth $40.7 billion a year. 2021 and will witness a CAGR of 40.5%, generating revenues of more than $439 billion by 2028.
The metaverse world had been taking baby steps for some time, but the pandemic was giving it a sudden boost as more and more people became dependent on technology. Demanding to work and study at home, or to shop and pay tickets, which were picked up at the height of the pandemic, is now the new normal.
At the same time, this space increases the adoption of non-fungible tokens and cryptocurrencies. Astute investors should, therefore, be on the lookout for businesses that are positioned to profit from a widening upside market.
Stocks to watch
We have narrowed our search to four stocks whose growth will be driven by the metaverse expansion. These are Lake, Inc. (AAPL – Free Report) Snap Inc. (Snap – Free Report) Autodesk, Inc. (ADSK – Free Report) and NVIDIA Corporation (NVDA – Free Report). These companies currently carry a Zacks Rank #3 (Hold). You can see the complete list of current Zacks #1 Rank trees here.
Lake, Inc. App developers are encouraged to incorporate machine learning and artificial intelligence into their apps. AAPL’s long-term growth opportunity is provided by its focus on autonomous vehicles and augmented reality/virtual technology. Over the years, Apple has bought several smaller businesses with expertise in AR hardware, 3D gaming, and VR software namely SensoMotoric, Vola Media, Motient, TupleJump, Turi, Metaio, PrimeSense, and Rails Data Inc. his works.
Apple’s expected profit growth for the current year is 3.4%. AAPL reported fourth-quarter fiscal 2022 earnings of $1.29 per share, beating the Zacks Consensus Estimate of $1.26 per share. Apple reports an earnings beat in each of the last four reported quarters.
Snap Inc. AR allows you to create smart displays through smart glasses. The company’s AR lenses have gained significant popularity, especially with the release of Studio Lens 2. In collaboration with Verizon, Snap revealed its first Landmarker Lens (a brand new tool that superimposes augmented reality on the real world) around the end of 2010. Lens takes advantage of Verizon’s 5G Ultra-Widebands capabilities with SNAP enhanced technology.
The widespread use of things like Scan and AR Bar is driving the use of lens-based AR and offers great growth opportunities for SNAP. In addition, the introduction of Local Lenses is anticipated, which allows for shared and continuous AR experiences across much larger regions of the world, increasing user engagement.
Snap’s expected growth for next year is more than 100%. The Zacks Consensus Estimate for the annual report has improved more than 100% over the past 60 days.
Autodesk, Inc. is expected to make a long-term profit from the transition of its business from perpetual licenses to subscription-based services. Top-line growth is expected to be driven by increased demand for Autodesk’s cloud-based (BIM 360 cloud platform, shotgun, and lifecycle fusion), mobile (AutoCAD 360), and design solutions. Apart from its e-store, ADSK also gains from its investment in digital infrastructure.
Autodesk’s expected growth for the current year is 30.2%. The Zacks Consensus Estimate for the current year’s earnings has improved by more than 1% over 60 days.
NVIDIAA robust portfolio of cutting-edge graphics cards has made him popular and is expected to help the business enter the metaverse gaming market. In this respect NVDA Omniverse is notable. It is a common universal platform where live interactions between users and applications with real-time speed and virtual reality thanks to its RTX technology.
NVIDIA’s expected growth for next year is 30.1%. Shares of NVDA have gained 14% in the past 30 days.