Forget Apple and Microsoft – This Company Will Win the Metaverse
The Metaverse is here.
Grounded in the Greek word meta, meaning after or beyond, this burgeoning synthetic universe, once cyberpunk fantasy, cannot be denied. It just doesn’t look anything like Neal Stephenson described in his seminal work Snow Crash just yet.
But one day… It just might.
Snow Crash describes the trials of Hiro Protagonist (yes, that is his name) in the Metaverse, a 3D virtual world populated by avatars, shops, and corporate advertising as real as the physical, offline world. It’s hard to imagine that the book didn’t have some inspirational effect on Meta Platforms Inc. or other virtual reality concepts that have been popping up since it was published in 1992.
Until then, though, this synthetic world is still in the earliest stages of construction, and the companies building it up will find themselves crowned the new big tech pantheon – and that’s the aspect of the Metaverse that has really grabbed my attention.
I took a stab at this topic in Tuesday’s video, but since then I have found even more stocks, more companies on the path to a digital deity who’ll flatten heaven and earth into the future we think we want.
Metaversal Gods of the Present and Future
I alluded to this above, but let’s make this clear: the Metaverse has existed in some form for many years. In 1995, you had Active Worlds. Then came Second Life, the Sims, and more modern titles like World of Warcraft, Final Fantasy XIV, and so many more. Too many to count, frankly.
The idea of creating and living as an avatar that projects an idealized version of yourself with certain powers, talents, or traits is seductive and Mark Zuckerberg is simply tapping into that desire with this metaphysical rebrand of Facebook.
The company he wants to build is one where, “you’re gonna be able to do almost anything you can imagine,” going above and beyond traditional social media. It appears Zuckerberg’s goal, along with companies inspired by his project, is to create an immersive platform based on games created by the likes of Epic Games and Sony. They want to design a space where you can participate in VR social gatherings or even corporate meetings as an avatar.
And several companies are working to create that kind of space.
Apple Inc (AAPL) has begun readying future iPhones for metaverse use. At their 2019 Worldwide Developers Conference, WWDC, executives openly discussed building the “components of a metaverse substrate,” designing a dedicated hardware and software device stack.
Microsoft (MSFT) is starting its efforts with its Teams meeting platform, where its announced its going to let users create digital avatars, and collaborate in its metaverse using the company’s highly touted HoloLens, as well as Facebook’s Oculus headsets.
Nvidia Corp. (NVDA) will be a major player in most companies’ metaverses, as the premier “virtual computing company,” which is how the company describes itself, specializing in graphic and “compute & networking” technologies. NVDA’s cloud-based visual and virtual computing and whole “infrastructure for gaming platforms” ensure this tech giant will be a constant presence in the metaverse.
But these tech giants should already be in your portfolio. If not, add them.
Because the metaverse is only just ramping up and companies this large, while kicking off these metaverse projects with billions of dollars in funding, are already huge. No matter how much their metaverse-related products affect our day-to-day lives, the resulting revenue won’t move the needle for the companies for many years because of how expensive these projects are.
The lesser deities, small companies already working to create the metaverse, will be the ones to translate growth in the metaverse directly to profits.
One of those companies is Unity Software Inc (U), which went public just last year.
If you’re not familiar, Unity is behind one of the most popular game development engines in the world. Colleges and universities across the US, including NYU, offer courses and professional certifications exclusively about the Unity engine and its VR potential.
That’s what makes the company so attractive in this space – it has experience with virtual reality design and platforming, which is crucial to metaverse development.
The company’s initial listing price was $52, it immediately soared 50%. In September it saw a high of $174.94 before falling to $81/36 in May of this year. With all the talk of metaverse this, that, and all things, Unity’s stock bounced back up and now trades around $186.
Not only is this young company a leading-edge player in the metaverse, in gaming, in the future, but its stock has also barely taken off.
What’s going to propel it to the stratosphere are the platforms and software solutions it creates so companies can monetize the real-time 3D future we’re stepping into. Unity isn’t a U.S. tech darling, it’s a global player. And since the metaverse is another universe, Unity’s got that space covered.
If you want a future of your own making, and a rich one at that, buy Unity Software and traverse the metaverse in style.
I’ll be back tomorrow with a new BS.H.
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