The term metaverse, once mentioned in a science fiction novel, has undoubtedly become one of the most talked about concepts in recent years. The metaverse, often likened to a virtual world, is an umbrella term for a range of technological innovations. These include immersive 3D worlds, augmented and virtual reality (AR/VR) technology and NFTs.
The rise in popularity of the metaverse has led several companies to invest in this futuristic concept. For businesses, a 3D world provides access to new audiences and markets, resulting in new digital revenue streams. And while the technology is still very much in its early days, the metaverse shows promise of significant long-term returns.
As more companies join the metaverse, investing in the digital realm has become a whole lot more accessible. But given its novelty, it could be years before the metaverse becomes a mainstream concept. Hence, investors willing to bet on its long-term potential are likely to get rewarded in the long run.
Roblox (RBLX)
First up on the list is Roblox (NYSE:RBLX), a gaming platform that enables users to play user-generated games or create their own games. The company’s unique offering has propelled it to the forefront of the gaming space. And with the gaming industry expected to grow to $312 billion by 2027, Roblox’s strong market position makes it a compelling investment opportunity.
Looking at the financials, Roblox reported revenue at $801 million, up 22 % from the prior year. This was fueled by bookings that rose 19% year-over-year (YoY). However, significant investments in its technological advancements resulted in a net loss of $271.9 million. Nevertheless, the company’s guidance for Q2 remains strong. Roblox anticipates revenue between $855 million to $880 million and bookings between $870 million and $900 million. This suggests the company will sustain its strong momentum well into Q2.
While its fundamentals remain strong, the company continues to battle short-term headwinds. Rising investment and infrastructure costs coupled with heated competition in the space have prevented the company from achieving profitability. However, investments in its future growth through technology innovations and expansions across markets could lead the stock higher. Investors willing to invest in its long-term potential will find RBLX one of the best metaverse stocks to buy now.
Meta Platforms (META)
If its new name is any indication, Meta (NASDAQ:META) has not shied away from its bullish sentiments towards the metaverse. In the last few years, the company has made significant investments in its virtual technology including VR headsets and smart glasses. However, with its metaverse goals still in R&D mode, the company Reality Labs business that houses its 3D technology continues to lose money. The business segment posted a $3.85 billion loss in the first quarter.
But looking at the broader picture, the metaverse business remains a small piece of the Meta pie. As the company continues to invest in the technology, it could generate billions in the future and become a major revenue generator. However, execs at the company believe it will take a decade for its metaverse investment to be fully realized. Until then, Meta’s advertising segment will serve as its major source of revenue.
While the returns of the metaverse may not come to fruition in the near term, META remains one of the top metaverse stocks to buy now for its long-term potential. As the metaverse gains mainstream traction, Meta’s technology is likely to play an important role in its adoption.
Autodesk (ADSK)
At its core, the metaverse involves creating digital 3-D worlds and this is where Autodesk’s (NASDAQ: ADSK) offering plays a role. The company’s Revit tool allows engineers to visualize buildings and structures in a 3-dimensional world. Much like those we would see in a virtual ecosystem. This offering has propelled Autodesk to the forefront of the metaverse, making ADSK a compelling play for those looking to invest in the space.
Coming to the financials, Autodesk reported impressive numbers in its first quarter. Revenue was up 12% at $1.42 billion with revenue increments across all business segments. Operating margins also grew by 21%, signaling solid business performance. Looking ahead, the company expects full-year revenue to rise by 12% to 15%.
With a strong core business, Autodesk is focused on expanding its offering to create more value for its customers. In May 2024, the company acquired Wonder Dynamics — a 3D cloud animation tool. The partnership will help Autodesk users create AI-powered live-action and 3-D graphics.
Autodesk’s strong financials and growing product offerings make it one of the best metaverse stocks to buy now.
On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.