The realm of metaverse stocks is a relatively new concept to investors. But it’s already grabbing plenty of attention. The idea of creating a persistent 3D virtual environment through the internet is quite an exciting and ambitious goal. And achieving it will require some serious technological innovation.
With that in mind, what are the best metaverse stocks to invest in? A common go-to answer is the recently re-titled Meta Platforms (Facebook). But are there more promising opportunities elsewhere?
A leader in graphical chips to power the metaverse
Designing a graphics processing unit (GPU) is an arduous task. That’s why there are only a handful of graphic card companies out there, the king of which is arguably Nvidia (NASDAQ:NVDA). Its technology is often synonymous with gaming. But its chips are being used throughout multiple industries, including cloud computing, artificial intelligence, and even self-driving cars.
Over the last decade, this stock has risen more than 8,500%! And even during the past 12 months, it continues to grow at an impressive triple-digit rate. That’s hardly surprising given the enormous and ongoing demand for Nvidia’s technology. And it’s why, to me at least, this stock is a prime candidate as a metaverse investment for my portfolio, although I’m not buying just yet.
The company is in fierce competition with Advanced Micro Devices, which has also begun tapping into similar target markets. The battle between these tech titans is unlikely to end any time soon. And it’s possible Nvidia could find it difficult to expand its market share, especially since its recent attempt to acquire Arm is in the process of being blocked by regulators. Nevertheless, I remain tempted by this firm’s track record.
A metaverse stock solving the building problem
Modelling, unwrapping, and texturing 3D environments is a time-consuming process that’s easily one of the primary reasons video games take several years to make. As someone who previously worked in this industry, I believe building the metaverse using this traditional route is simply not a viable approach. That’s what makes Matterport (NASDAQ:MTTR) so intriguing.
This young business has developed its own photogrammetry technology that can be used from an iPhone. In simple terms, it deploys artificial intelligence to construct 3D environments by scanning real-life locations with a camera. A process that would take hours for an experienced 3D artist could take minutes for someone on their phone.
It’s undoubtedly impressive technology. But is there a viable business here? Matterport sells its software as a service through monthly subscriptions. This generates a recurring revenue stream growing at an impressive double-digit rate. Both are desirable traits, in my opinion.
However, like most technology stocks, it remains an unprofitable venture. And after only recently becoming minted as a public company, I think it’s a bit early to add it to my portfolio. But I’ll be closely watching Matterport moving forward.